eBee Kenya and STROOM get grants from P4G Capital

From the newsletter

Electric bicycle companies eBee Kenya and STROOM have received a grant totaling $695,000 from P4G Capital, a capital finance company. The Kenyan start-up will receive $350,000, while South Africa-based STROOM will receive $345,000 to scale their operations. This partnership expects to create over 700 green jobs.

• As part of this project, eBee Kenya will collaborate with Critical Mass as the execution partner and Sustainable Transport Africa as the lead administrative partner. Additionally, two high-level bike rides will be organised to provide government officials with first-hand experience of the challenges faced by cyclists.

• On the other hand, STROOM will act as the lead business partner, while the Greater Stellenbosch Trust will serve as the lead administrative partner.

More details

• Although investment in e-mobility start-ups is still emerging, the grants from P4G highlight a growing recognition of the potential for electric bicycles in addressing urban transportation challenges in Africa.

• The electric bicycle model has often been overlooked by investors in favour of electric motorcycles or cars, which are perceived to offer higher profit margins. However, the relatively low competition in the e-bicycle sector presents an untapped opportunity.

• Although the business model is gaining traction at a slow pace, greater adoption can be achieved through raising awareness and increasing the sale or leasing of units. Companies can enhance profitability by integrating features such as cooler boxes for distributing vaccines, fresh groceries, or flowers, further improving the utility and market appeal of e-bicycles.

• STROOM, as South Africa's sole domestic cargo e-bike manufacturer, has developed four cargo e-bike models tailored for urban delivery. To date, it has completed over 35,000 km of deliveries in townships and reduced CO2 emissions by 3.8 tons.

• Currently, eBee has distributed more than 1,500 electric bicycles across Kenya, Uganda, and Rwanda since its inception in late 2021, reducing approximately 1,562 tons of CO2 emissions. The company now seeks to shape its market by fostering cycling infrastructure with the support of respective governments.

• Also, the sustainability efforts of electric bicycle companies have even caught the attention of governments. For instance, eBee Rwanda partnered with the City of Kigali government two months ago to lease e-bicycles to government officials for two years, enabling them to commute to work.

• Another example would be that of Green Riders in South Africa which has created 2,025 jobs through last-mile deliveries using electric bicycles. They have completed approximately 855,000 green deliveries and operate a unique model that generates additional income through advertising opportunities on their delivery boxes. This approach has attracted business partners such as Mr D, Takealot, Telkom, and Bank Zero.

Our take

• Electric bicycles are inexpensive and easy to operate since the average difference between them and e-motorcycles in Africa is approximately $500. This makes them more economical for fleet expansion in delivery companies making them ideal for fast-growing urban centres such as Accra, and Lagos. These cities offer significant potential markets due to their high urbanisation rates, heavy traffic, and the increasing need for efficient last-mile delivery solutions.

• eBee Kenya is indeed establishing a blueprint for other electric mobility companies in Africa. Their rapid expansion and focus on creating meaningful employment opportunities, particularly for women and youth, set a strong precedent. Other potential cities they may consider to expand in Kenya include Nakuru and Eldoret.

• Other companies can learn from eBee's approach to localised product design, strategic partnerships, and community engagement to drive adoption and effectively scale their operations.