Hello Cabs, Yangon’s leading ride hailing app, is learnt to have raised an undisclosed amount of funding from Nay Min Thu, founder of iMyanmar Group, an executive with direct knowledge of the development said. The latest round of funding values the company at a high seven-digit figure (US dollars).
Hello Cabs, which is the first on-demand metered taxi service in Yangon, started operations in 2014 with a $1 million initial investment by Yaung Ni Oo Co Ltd, Strategic Development International (SDI) Holdings Co Ltd, and Singapore-based GAP VC.
Hello Cabs, while having the first mover advantage, is set to have a battle on its hands. Last month, Singapore-based ride-hailing platform Grab launched a beta trial of GrabTaxi service in Yangon, marking its first expansion into a new market in nearly three years. Grab also got a head-start over its rival Uber in entering one of the few remaining untapped markets in this region. Uber executives too had met Myanmar government representatives in January, although the US-headquartered firm has so far not announced any plans for the country.
Indonesia’s motorcyle-hailing startup Go-Jek, according to a recent report in the Wall Street Journal, is in talks with investors to raise $1 billion to expand operations across the region, including the Philippines, Thailand, Myanmar and Vietnam.
Hello Cabs investor Yaung Ni Oo is involved in importing cars and is also a player in the traditional taxi service, while SDI Holdings Ltd is into trading, telecommunications and digital ventures. iMyanmar Group businesses include iMyanmar House, iMyanmar Ads, iMyanmar Cars and Shwe Rooms. Singapore’s GAP VC is learnt to hold less than 25% stake in Hello Cabs currently.
“We have started work (app-based taxi metering service) in Mandalay – the same is happening in Yangon, where the testing and trials are on,” said Dr Martin K Nanda, president of SDI Holdings Ltd. He, however, declined to comment on the company’s fund raising or its valuation.
Hello Ride currently has about 1000 cabs registered with it, a 100% growth from the 500 registered cabs in mid-2016, Nanda said, while adding that he shared the opinion that Hello Cabs was a not just a national brand, but a home grown one too.
One of the company’s primary tasks has been educating taxi drivers in Yangon for safety and quality performance among their member fleets, he said.
“We’re putting a lot of effort into ensuring that we have a much larger active fleet of cabs,” Nanda added, during an during an interaction with DEALSTREETASIA.
As Yangonians have been familiar with using a taxi without a metering system, he said it has been currently challenging to educate the Hello Cabs drivers to use the metering system.
Nanda said Hello Cabs has almost reached an operational breakeven point, and added they were currently offering a subsidised price, when compared to international rates.
“We are prioritizing on customer service – instead of attracting customers through discounts, we are attracting users through our quality service,” he added.
Through their upgraded app of Hello Ride, users can view an upfront cost of a trip prior to undertaking it. Some services tested include for a ride sharing service and for a fixed rate the customers can set prior to a ride.
Technology infusion in transport in Myanmar
Another popular app-based metering cab service provider is Oway Ride, which operates under Oway Group whose primary businesses are online travel booking and on-demand ride hailing service. in Mid 2016, it was looking for financing, counting investors like Taft Co. Pte. Ltd., Emerging Markets Group Investments, BeeNext Capital and Qualgro Capital among its key share holders. The International Finance Corporation, a private lending arm of the World Bank Group, at that time, had proposed an equity investment of $3 million in Oway Group. Oway did not respond to a query from DEALSTREETASIA seeking comments on the proposed investment. This portal has learnt that Emerging Markets Investment Advisers has made an investment in Oway.
Myanmar saw the entry of the two foreign telecom operators in 2014, Telenor and Ooredoo, after the quasi civilian government took power. This helped the locals broaden their interest in technology, especially related both businesses, and use the improved connectivity for the same.
In the transport and travel sector, some local startups have taken the opportunity to improve the service in Myanmar. For highway bus ticketing service, Star Ticket has made the purchase of bus tickets available through their app or via the nearest convenience stores.
While well-known foreign ride hailing services are planning to set foot in the country, the Ministry of Transport and Communications and the Regional government are yet to prepare a detailed plan of how to accommodate these new modes of transportation services.