South African mobility start-up Locomute would this month visit Silicon Valley in California in an attempt raise $5 million (R75 million) in equity to allow the company to expand, said Locomute chief financial officer Ntando Kubheka.
Locomute, which employs 18 permanent staff, operated from a house in Centurion and was a “garage start-up”, Kubheka said during an interview.
Kubheka said that Locomute was going to Silicon Valley because there was no appetite for venture capital in South Africa.
Investec confirmed that Locomute was part of a one-week exploratory business trip to Silicon Valley later this month.
“The tech entrepreneurs will meet with venture capital funds, angel investors, intellectual property lawyers and Stanford University academics,” Investec said.
Locomute started in June 2015 and had its genesis as an MBA assignment that Kubheka and Tumisang Marope, Locomute CEO, worked on in 2014 as part of their course at the Nelson Mandela Metropolitan University in Port Elizabeth.
The company is owned by the four directors of the company, Kubheka, Marope, Locomute executive chairman Sibusiso Xaba and Vuyisile Majola, the company’s chief operations officer.
When Locomute started, the company had six vehicles. Today it has 364, mainly Fiats.
Locomute chose Fiat because it gave the company a discount and Fiat cars are less prone to being hijacked. Since the company started, it has had three break-ins in their cars, but none was stolen.
Locomute subscribed to Apple founder Steve Jobs’ mantra that “human beings are inherently good”, Kubheka said.
The business consists of car rentals either on a daily or hourly basis, which the company calls “car-sharing” and they can be booked via the company’s internet app.
Of 364 cars in Locomute’s stable, 70% are rental cars and 30% are used for car-share.
Upfront costs include a one-off R199 that provides a lifetime membership.
Using the car-share option, Locomute charges R1.80 a minute and R3 a kilometre, if you hire a car for up to four hours, and the first 20km travelled every hour is free.
When you book cars with Locomute using the car-sharing option, you don’t pay for petrol, insurance, e-toll or parking costs.
Locomute’s cars are parked all over the cities where the company operates so, if you are a registered member, you can use those cars as long as you make your way to where the cars are located. If you want a car delivered to you, there is an extra charge.
You locate the cars using Locomute’s internet app. Once you are done with the car, you park it, lock the car and leave it.
Locomute operates in Johannesburg, Cape Town, Pretoria, Durban and Ekurhuleni, and is looking to expand into Port Elizabeth and East London. The company is also looking to expand into Kenya, Nigeria and Ghana.
International examples of companies like Locomute include European care-sharing company DriveNow, which is partly owned by BMW, Car2Go, which is owned by Daimler, and ZipCar, which is owned by Avis Budget in the US.
Kubheka said Locomute was largely growing via the exposure the company is getting via its partners like Diners Club and AA. Locomute has 15 000 registered members.
The founders of Locomute are also working on setting up a food app called Convivial. This app would turn every table into a diner and everyone’s home could become a restaurant, Kubheka said.
“Convivial will be to cooking what Airbnb is to accommodation. You can offer meals in your home or set up a pop-up restaurant in a parking lot,” Kubheka said.
Airbnb is a US start-up that consists of a website for people to list, find and rent lodging.
The Convivial food app would allow people to earn extra money by creating an event, becoming a host and then inviting people to book, Kubheka said.