Uber, Airbnb Are Most Valuable US Tech Startups Doing Business In Africa
Ride-hailing app Uber and home-rental app Airbnb were the two most valuable startups in the U.S. in 2016, Business Insider reported.
Both Silicon Valley tech firms made news in the past year by expanding and growing in Africa, where they have helped create income for thousands of African entrepreneurs in countries plagued by high unemployment.
These and other startups have become so valuable that a new class of startup has been named for them. It goes beyond “unicorns” — private companies valued at over 1 billion dollars.
Uber and Airbnb are now known as “decacorns” — companies valued at over $10 billion, Business Insider reported.
Airbnb in Africa
Valued at $30 billion, Airbnb had a challenging year in the U.S. in 2016, but it is still the second most-valuable startup in the U.S. In August, Airbnb filed to raise a $850 million round of funding. Soon after, the startup was in legal battles in two of its most crucial U.S. cities, San Francisco and New York.
This didn’t slow it down. In November, Airbnb launched a new service called Trips that it hopes will move it towards being a more full-service travel company.
In Africa, Airbnb has at least 60,000 listings. One in four of them — about 15,000 — are in Cape Town, Cape Times reported, according to Independent Online.
A year ago, in January 2016, Christian Science Monitor reported that the then-7 -year-old Airbnb had 40,000 listings across the continent. The number of bookings in South Africa – the leading market – had grown 259 percent over the previous year.
Morocco was close behind South Africa, with thousands more listings scattered from Kenya to Mauritius, CSM reported:
It’s part of a wider trend in Africa toward a technology fueled “sharing economy,” networks allowing consumers to crowdsource everything from cab rides and Wi-Fi to antiques and tractors.
In the process of tapping into the sharing economy, Airbnb tapped into a relatively unfilled niche in Africa, CSM reported. Doing so helped Airbnb become the second most valuable U.S. startup in 2016.
The service helps supply a longstanding demand for reliable, mid-range accommodation in many African cities.
“Airbnb could transform the tourism industry in sub-Saharan Africa, particularly because we don’t always have the proper hotel infrastructure to support the guests who come in from around the world,” said Joe Addo, a Ghanaian architect who rents spare rooms in the home he designed and built for his family in the suburbs of Accra.
For now, Africa is still “only a sliver of Airbnb’s total global business, which
spans at least 190 countries and includes more than 1.5 million rentals, CSM reported. But demand is expected to grow.
Uber in Africa
Valued at $68 billion, Uber is the most valuable startup in the U.S. and across the globe, outpacing its closest global rival, Xiaomi, by more than $20 billion, Business Insider reported.
Uber raised $3.5 billion from a Saudi Arabian investment fund and $2 billion from a leveraged loan in 2016.
It also closed a deal with its No. 1 rival, China’s Didi Chuxing. Didi invested $1 billion in Uber global. Uber is focused on expanding self-driving car testing and bettering ride-hailing rivals in Southeast Asia.
Uber added cities in Africa in 2016 and now does business in 14 African cities including the following: Abuja, Accra, Alexandria, Cairo, Cape Town, Casablanca, Dar Es Salaam, Durban, Johannesburg, Kampala, Lagos, Mombasa, Nairobi, and Port Elizabeth and Pretoria.
Uber has around 40,000 drivers in Egypt. About 40 percent of them were unemployed before joining the company, according to Pierre-Dimitri Gore-Coty, Uber’s head for Africa, Europe, and Middle East in a Daily News Egypt interview.
In Kenya, the number of Uber drivers grew four-fold this year to 4,000 thanks to a price cut in July, Business Daily Africa reported.
In fact Uber has more data on users than they have on Uber, Memburn reported:
Uber tracks you all the time, so it knows a lot about you. It knows when you’re sleeping, it knows when you’re awake. It knows when you’ve been bad or good…
The company has launched its UberPool carpool service in more than 30 countries, letting people living in the same area ride the same car when heading to the same destination.
Egypt is ripe for the service and could be getting it soon, Gore-Coty told Egypt News Daily.
UberPool didn’t have a launch date in South Africa yet, said Timothy Willis with Uber South Africa in a Memeburn report.
“You have to reach a certain level of scale to launch Pool, just within the city. We’re not quite there yet but hopefully soon,” Willis said.