Kenya’s Araka launches on-demand super app that prioritises drivers

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Kenyan startup Araka has launched a super app that seeks to solve challenges faced by on-demand mobility and logistics drivers.

Founded in November 2021 by CEO Mark Pascal alongside Drake Smith, Michael Kariamu and Emmanuel Maingi, Araka is a fintech, logistics and mobility platform that helps digital economy drivers own their vehicles for less, access short-term credit, and connect with clients.

The platform allows customers to book all sorts of services, key among them rides and deliveries, but claims to be more driver-focused than its competitors.

“At Araka, we solve the two main problems faced by digital drivers,” Pascal told Disrupt Africa.

The first of these is the high commission charged by similar platforms. 

“Where our competitors charge drivers up to 25 per cent commission, we charge only five per cent, hence helping our drivers to save up to 60 per cent of their current spending on commissions,” Pascal said.

The second major challenge is the high cost of consumer and work tool loans, where Araka is undercutting up to 150 per cent monthly interest on short-term loans to drivers for consumer credit like fuel, airtime and data.

“We offer our riders work tool financing at low four per cent monthly interest, leading to up to 12 per cent annual interest savings,” Pascal said. 

What’s the motivation for all this?

“The gap we are filling, and hence our main value proposition, is the high cost incurred by digital drivers when they are working, both in accessing clients, where they pay up to 25 per cent commission, and in access to work tools, such as the vehicles, phones, or fuel, where they pay up to 150 per cent interest on short-term loans. Our USP, our main value to the drivers, is our low cost of connecting to clients, and low cost of finance to help them work,” said Pascal.

In doing so, Araka is going up against people who purchase and rent their motorcycles to riders, offering no path to asset ownership, as well as ride-hailing platforms such as Bolt, Little, and Uber. It was doing this bootstrapped until July, when it raised a funding round from a local Kenyan VC, with follow-on anticipated once it meets certain milestones. 

“We so far have seen 2X daily growth rate in users and drivers since we received the investment, and a proportional increase in revenues,” said Pascal.

Only live in Kenya for now, Araka’s “big hairy goal”, according to Pascal, is to be in all 54 African countries ahead of an anticipated IPO in 2027.

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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