Mbay Mobility targets $7m seed round valuation

From the newsletter

Senegal-based electric taxi firm Mbay Mobility is targeting to reach a valuation of $7 million in its upcoming seed round. The company is currently valued at $4 million and has already raised $315,000 in funding. It is aiming to raise an additional $210,000 in pre-seed funding, which would bring their total funding to $525,000. 

• Mbay targets to use the new funding round to electrify taxis in Senegal. The country has 16,000 taxis, mainly in the capital Dakar, but almost all are ICEs.

• The entry of ride-hailing apps such as Uber and Bolt in Africa have revolutionised the taxi business on the continent. But more than 95% of all taxis in Africa use fossil fuels.

More details

• Mbay is a pioneer in the electric taxi market not only in Senegal but Francophone West Africa. The startup sources its EVs from leading Chinese manufacturers and provides financing options for taxi drivers to switch to EVs.

• The company has invited investors to invest in it with a minimum of $10,000. The funding drive is the central piece of its strategy to achieve an ambitious target of deploying 33,000 electric vehicles across major urban centres in West Africa by 2033.

• Senegal has a population of about 18 million people, 84% of which have access to electricity. Despite this, the penetration of EVs remains low. Further, most of the taxis in use are very old vehicles, indicating that the users have limited capacity to upgrade to expensive models.

• The recent entry of EV companies such as China’s BYD in Senegal will however accelerate the presence of EVs in the market, giving consumers a wider pool of vehicles to choose from. The company launched the BYD Atto 3, one of its cheapest EVS, in the country in July 2024.

• A common bottleneck for EVs in Africa is the lack of sufficient charging stations, which is also the case for Senegal. This deficiency is especially worrisome for taxi drivers, who accumulate hundreds of kilometres daily.

• EV dealers such as CFAO Mobility, whose subsidiary Loxea launched the BYD Atto 3 in the country last year, are working on availing charging stations. Last year, the company inked a deal with TotalEnergies to set up two charging stations in Dakar. 

Our take

• Adoption of electric taxis will remain a pipe dream in Senegal unless the country removes its high taxes on imports. Senegal charges a 70% import tax on EVs, which is too high for a country where half of the population lives below the poverty line.

• Senegal has one of the highest fuel prices in Africa, making the cost of running an ICE taxi expensive. This means that electric taxis could be an attractive option due to the lower operational costs, but only if the prices come down first.

• The country’s proximity to Morocco, an emerging leader in electric mobility on the continent, is an advantage. It will be faster for Senegalese companies to buy components from Morocco as opposed to shipping them from distant sources like China.