The company will seek to raise $50m in equity in a Series B round at the end of this year, Dana says. He is also aiming to secure a $30m debt facility this year. Those plans are separate from the $10m in pre-Series B funding that the company is now trying to raise.
The company, founded by Dana, co-CEO Gregory Costamagna and Emeka Ajene, started in Togo in 2018 as a motorcycle ride-hailing service. It has since expanded across francophone west and central Africa, and expanded its services into transportation, delivery, and cashless payments via a single app. The company also provides asset financing for its drivers under which they can buy their vehicles.
Such “super apps” are well suited to frontier markets where competitive services markets are yet to develop, Dana says. The lack of competition means that “as soon as you have the technology you think about adding more and more verticals.” The idea for the Gozem super app, he says, came from seeing the Grab ride-hailing platform in Singapore and Indonesia’s ride and delivery service Gojek.
- Gozem raised $5m in Series A financing in December. Investors include Plug and Play Ventures of the US, Launch Africa in South Africa, Singapore’s Bansea and Virtual Network of Switzerland.
- Launch Africa general partner Janade du Plessis has said that Gozem has been the fund’s star investment to date.
Tencent in China was among the first to develop a super app. Research from Sturgeon Capital has argued that super apps are well suited to frontier markets due to their low internet and data costs, and the fact that many users have not built up a range of preferences and habits offline.
Cheap smart phones with limited functions make it impossible for many consumers to install multiple apps, the research says, while having a single log-in is appreciated by older users with less experience of using technology. Super app providers also hold huge amounts of customer data which can be used to assess risk for loans, the research says.
- The decision to start in the small francophone market of Togo was a deliberate one aimed at making sure that any mistakes were cheap ones, Dana says. “We were ready to make a $1 mistake in Togo and not a $1m one in Nigeria.”
- The existence of the CFA franc pegged to the euro also made francophone west Africa a safer bet to start with over Nigeria with its depreciating naira, Dana says.
Gozem now aims to expand to Democratic Republic of Congo (DRC) and Senegal, and will then seek to enter anglophone markets Nigeria and Ghana.
Dana doesn’t give a timetable for new market entry. When going into a new country, Gozem “tends to start with transportation” before moving on to other services, he says.
Gozem is confident that it has learned enough in small west African markets to unleash its super-app in the largest ones.
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