Ride-sharing service provider for office workers, LULA, has acquired the South African branch of Zeelo, a US-based staff bus-sharing startup.
The financial details of the cash-only transaction have not been disclosed, but both companies have confirmed the acquisition.
Zeelo entered the South African market in 2019, raising $33 million in the process. The company managed to facilitate over 2 million rides annually in South Africa before deciding to shift its focus to the US, UK, and Ireland markets.
This exit allows Zeelo to concentrate on its core markets while leaving its South African operations behind.
LULA plans to leverage Zeelo’s existing user base of more than 18,000 riders to enhance its presence across South Africa. With the integration of Zeelo’s operations, LULA aims to capture a larger share of the country’s competitive transportation sector.
This acquisition is expected to largely boost LULA’s market penetration and operational capabilities.
Transportation remains a major expense for South African workers. Statistics show that employees spend an average of R2,180 ($121) monthly when using personal cars and R960 ($53) when using taxis.
Ride-sharing platforms like Uber for Business, MoveInSync, and LULA help employers mitigate these costs for their staff, making them valuable services in the workplace transportation sector.
Founded in 2018 by Velani Mboweni and Xabiso Nodada, LULA operates in five major South African cities. The platform has completed rides for over 380 companies, with a network of more than 1,000 registered drivers and shuttle fleet operators.
Unlike traditional transportation companies, LULA does not own any vehicles. Instead, it partners with individual drivers and fleet operators, earning commissions ranging from 20% to 40% per ride.
The acquisition is expected to make LULA cashflow positive, providing a solid financial foundation for future growth. Velani Mboweni, LULA’s co-founder, noted the importance of a measured growth strategy, stating, “It’s better to scale smart than to scale fast.”
Sam Ryan, Zeelo’s founder and CEO, expressed confidence in the transition, stating, “We are excited to support the move of our customers and suppliers to the LULA platform.” This seamless transition is expected to benefit both Zeelo’s existing customers and LULA’s expanding user base.
This acquisition points to LULA’s mission to boost office worker transportation in South Africa, while Zeelo refocuses on other markets.
The deal is a shift in the ride-sharing industry, bringing enhanced services and broader market reach for LULA.
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