Lula, a ride-sharing service provider for office workers has acquired the South African branch of Zeelo, an American staff bus-sharing startup in a cash-only deal.
Lula will integrate Zeelo’s existing user base of more than 18,000 riders in South Africa to its fleet, grow its presence and consolidate across South Africa in a move to grow its market share, boost its market penetration and up its operations. Zeelo is exiting the South African market to focus on US and Europe markets.
Headquartered in London and Boston with an R&D team in Spain and live operations in the UK, US and South Africa, Zeelo was founded in 2016 by Sam Ryan, Barney Williams and Dani Ruiz after selling their ride-sharing app JumpIn to Addison Lee in 2014. Launched in South Africa in 2019, Zeelo raised $33 million for the southern Africa nation but only facilitated under 2 million rides in South Africa and chose to exit the market.
According to Sam Ryan, Zeelo’s founder and CEO, “We are excited to support the move of our customers and suppliers to the LULA platform.” This deal will also make LULA cashflow positive and give it a solid financial foundation for future growth.
Lula, on the other hand, was founded in 2018 by Velani Mboweni and Xabiso Nodada and operates in five major South African cities with over 380 companies as partners and over 1,000 registered drivers and shuttle fleet operators. LULA does not own any vehicles but works with individual drivers and fleet operators on commission.
The deal will also LULA’s mission to boost office worker transportation in South Africa and bring enhanced services and broader market reach for LULA. “It’s better to scale smart than to scale fast.” said Velani Mboweni, LULA’s co-founder, adding that this seamless transition is expected to benefit both Zeelo’s existing customers and LULA’s expanding user base.
In March last year, Zeelo secured $14 million in equity funding to further its growth in the United States and on the other side of the Atlantic and reinvest profits in the UK and double its business there in the next 18 months. Zeelo aims to run a fully zero-emissions fleet by 2030 and has bee funding several electric coach trials for partner operators.
“Developed markets are underserved for daily mass transportation needs and we have seen increased demand for our transit-tech solution in the United States over the past 12 months,” says Mr Ryan, who is Chief Executive Officer. “Due to this demand, we’ve had a growing number of requests from shuttle operators to leverage our technology to improve their client relationships and streamline operations. This new capital will accelerate Zeelo’s expansion across the US for an accelerated rollout of large-scale, multi-site transportation contracts, with some of North America’s biggest household brands, as well as further investment in our software offering.”
In 2022, SWVL announced intention to acquire Zeelo, the UK’s largest smart bus platform and technology scale-up, measured by bookings. The firm said joining forces with Zeelo builds upon it’s recent successful acquisitions of Viapool and Shotl, and announced acquisitions of Volt Lines and door2door, and provides a launchpad to rapidly land and expand business operations in three strategic developed markets including the UK, South Africa and the US. Zeelo’s seasoned team of over 160 staff across the globe, including 29 software engineers based out of Zeelo’s R&D hub in Barcelona were to join Swvl but the acquisition which was expected to be completed in May 2022 didn’t go through due to market conditions.