Grace Ashiru
LULA, a ride-sharing platform tailored for office workers, has acquired the South African subsidiary of Zeelo, a US-based staff bus-sharing startup, for an undisclosed sum. Both companies chose not to reveal the details of the cash-only transaction.
Zeelo, which launched in South Africa in 2019 and has raised $33 million in funding, is exiting the country to concentrate on its operations in the US, UK, and Ireland. Until its departure, Zeelo was facilitating over 2 million rides annually within South Africa. LULA plans to leverage Zeelo’s established presence, which includes more than 18,000 riders, to further expand its reach across the country.
Transportation is the largest work-related expense for South Africans, according to Statistics South Africa. Workers spend an average of R2,180 ($121) when commuting by car and R960 ($53) when using taxis. Platforms like Uber for Business, MoveInSync, and LULA help employers reduce these costs for their employees. With this acquisition, LULA aims to capture a larger share of the market.
Established in 2018 by Velani Mboweni and Xabiso Nodada, LULA operates in five cities across South Africa. The company boasts the completion of 700,000 rides for more than 380 companies, with a network of over 1,000 registered drivers and shuttle fleet operators. Rather than owning the vehicles, LULA partners with individual drivers and shuttle fleet operators, earning a commission that ranges from 20% to 40%.
Leveraging the revenue generated from Zeelo’s operations, LULA aims to achieve cash flow positivity. This financial stability will enable the company to “scale smart, rather than scale fast,” according to Mboweni.
Commenting on the strategic move, Sam Ryan, founder and CEO of Zeelo, remarked, “The decision to exit the region was a challenging one. However, we are excited to support the transition of our customers and suppliers to the LULA platform.”
