Open Africa Founder: Adetayo Bamiduro, MAX
Logistics, Financial Services and building EVs for emerging markets
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Hi friends 👋🏻,
Welcome to another essay on Open Africa.
I spoke with Tayo of MAX to discuss MAX’s founding story. MAX is building the largest vehicle subscription and financial services platform for transport operators and drivers across Africa.
Tayo is optimistic that within the next 3 - 5 years, MAX would replace almost 50% of fuel-powered vehicles in Africa and other emerging markets with EVs.
TL;DR
If you only have a few minutes to spare, here's what you should know about Tayo and MAX.
MAX has evolved from a logistics startup to build a vehicle subscription and financial services platform for transport operators and drivers across Africa. With MAX, drivers with no banking history can access vehicles, insurance, and much more on a subscription basis.
In the first week of MAX’s pilot, they had 20 motorcycles but only managed 2 deliveries. Tearing down every assumption they had, MAX has grown its fleet size to thousands and raised $31m in the process.
MAX is solving the issues facing drivers, one of which is the lack of diversity. For a male-dominated industry, they have over 50 female champions (read drivers) with that number set to double in the next quarter.
MAX has increased the earnings of drivers by almost 4x. The industry average for motorcycle/Okada ranges between ₦40k - ₦45k monthly. Today, drivers on MAX are making multiples of that to provide for their families.
Tayo believes that the M3 and other electric vehicles could replace almost 50% of fuel-powered vehicles in Africa within the next 3-5 years.
Let’s get to it.
Open Africa Founder: Adetayo Bamiduro, MAX
Hello Tayo! What's your background, and what company are you working on?
I’m Adetayo Bamiduro, CEO & Co-Founder of MAX.
MAX is building the largest vehicle subscription and financial services platform for transport operators and drivers across Africa. MAX’s proprietary technology enables informal drivers with no banking history to access vehicles (including electric vehicles), insurance, digital wallets, and e-Hailing services on a subscription basis.
In Nigeria, our footprint cuts across Lagos, Ibadan, Akure, Ekiti, Kano and Osogbo. We are rapidly expanding into other African countries like Ghana and Egypt.
In one sentence, what do you want a reader to remember/take out from this interview?
Anything is possible.
Ok, that might be cliche, but the fact remains that you are only limited by the audacity of your vision. Once you have a clear vision, you must put in the work- the commitment, the dedication and resilience to build your company.
What motivated you to get started with your startup?
As I was going through my program at MIT, I kept thinking of how I could apply the learnings to solve the problems back home in Nigeria, and Africa.
What became MAX started as a project at MIT.
I wanted to tackle the mobility and logistics challenges of businesses in Africa, especially in the eCommerce sector. There was a real need in the informal transportation industry in Nigeria. There was no proper regulation for drivers, and there existed a real need for safety and proper training for these drivers.
Still, I couldn’t do this alone.
While at MIT, you meet a lot of creatively gifted people. Chinedu Azodoh was one of such people. I met him through a mutual friend and from the get-go, it was obvious that his experience in finance (especially developing relevant financial models for a logistics startup in Nigeria) would be a good fit for the project.
By the time we finished our MIT programs, we asked ourselves these questions. “Do we want to stay and work as consultants for some of the major corporations? Or should we go home and apply what we've learned to the challenges we've identified?
Even with all the risks, the answer was unanimous for me and Chinedu.
So, me and Chinedu, backed by the faculty and great friends from around the world, returned home to test out a pilot. The rest, as they say, is history.
What went into building the initial product?
We returned in 2015 to begin our pilot, and only managed 2 deliveries in the first week. This helped us to realize that a lot of the assumptions we had before coming into the market were false. This prompted us to take a step back and strategize.
Though it was a daunting challenge, we were excited and spurred by the grand vision of all we were going to achieve. We believed (and still do) that e-mobility holds the key to unlocking Africa’s incredible potential. When people and goods can move reliably and predictably, we can unlock economic opportunities for businesses and entrepreneurs across our continent.
It was also helpful that we got into a startup accelerator program called TechStars, which also helped with some funding. After this, we began gaining a lot more traction and officially started the business on 4th January 2016. By March 2016, we closed our funding round raising $960,000 to begin scaling.
Looking back today, It was a very risky endeavour because the stats are everywhere. 95% of most startups fail within the first year. But a good thing about our journey was that we both knew we didn’t want a job anymore after leaving MIT and felt that we knew enough to make a change.
And if it was not us, then who? If not then, then when? These were the questions we asked ourselves and decided to take the plunge.
What was the journey to reach the first 1000 drivers?
We moved back to Ogun State from the US in 2015 excited to build the pilot.
It was a rude awakening as we only managed 2 deliveries in the first week. This was a true learning opportunity as the lofty assumptions we had about the market were quite false. We took a step back to strategize and refocus on how we were going to enter the market.
We later moved to a 1-bedroom apartment in Lagos for a year, before getting a place that served as both our office and living quarters. It was extremely uncomfortable, as you can imagine, but our priority was to build a business. We suffered, but for a worthy cause.
To build the business, we had to acquire the primary customers, our Champions (drivers). We tried everything- radio interviews, billboards, street storms, digital ads, etc. The digital strategies didn’t work for us because most of the riders did not have access to smartphones. The other channels also produced differing results.
However, the use of street storms with our field sales agents proved to be most effective.
At this time, we were only providing logistics delivery for eCommerce businesses. Over time, we realized that we and a lot of other businesses relied on the use of motorcycles to get around quickly and avoid the traffic. We thought about ways to provide mobility services in a standardized way, with uniform pricing, and a focus on safety and affordability.
We tested the product in the market, and guess what, people loved it.
From our humble start with just 20 motorcycles and a whole lot of heart, we grew the fleet to over a thousand in about 2 years. And we are still growing.
As MAX evolved over the years, we have strived to solve the major pain points facing drivers in the African market, with increasing levels of success. One of such is the lack of opportunity for women in a male-dominated industry. We now have over 50 female champions, with that number set to double in the next quarter.
What's your business model, and how have you grown revenue?
At MAX, the goal is to transform the experience for commercial drivers who we refer to as Champions.
We work towards providing them with all the resources they need. This includes accessing loan facilities to get low emission vehicles, and access to the right support- complete vehicle papers, health care facilities and more.
This commitment to the welfare of our Champions has led to phenomenal growth and a boost of investor confidence in MAX. So much so, that in 2021 alone, we were able to unlock $22m in debt financing, and just recently raised $31m in our Series B round of funding.
What are the biggest challenges you've faced and obstacles you've overcome?
One of our biggest challenges has been getting financing to get the vehicles for our drivers.
At any point in time, we have tens of drivers that have gone through our process, completed the training, and are awaiting their vehicles. This is why we have a major push for our fundraising, as it will help us to unlock more vehicles to empower our Champions.
Building a business is hard, building one in Africa is a lot harder. What was your most 'if I perish, I perish' moment that turned out to be worth it?
The change in regulation for 2-wheelers commonly called Okadas in Lagos in 2020 is one of those moments.
We were only doing business in Lagos at the time. While we had always intended to grow to other states, we needed to first establish ourselves in this one. And until the ban, we had a pretty good run.
It was a tough period, but quitting was never an option. It forced us to refocus on our big mission. Launching new cities outside Lagos was critical. At the time, we knew that was the next step. Fortunately, it paid off, and we have since expanded into 6 states.
How did you motivate yourself and your team to avoid failure when things were tough?
We keep reminding ourselves that what we are doing is so critical. And if we do not do it, so many people won’t have the opportunity that MAX provides to improve themselves.
Before joining MAX, the industry average for motorcycle/Okada ranged between ₦40k - ₦45k monthly depending on their factors like daily repayments, maintenance, etc.
Today, we have Champions making 3x, 4x or more than these figures and are finally able to provide for their families. At MAX, we believe and can see that we are making a difference, and this keeps the future exciting.
What makes you proud about what you've built so far and what are your goals for the future?
Several things brighten my day.
The daily impact stories we receive from the Champions. Like how Mrs Azeez Monsurat a widow, who was almost homeless with her kids, became the proud owner of a Tricycle, in a newly rented apartment, with all her children back in school.
Such stories always bring a smile to my face.
The amazing team of dedicated professionals we have been able to build at MAX. With each one willing to go far beyond to ensure the vision of the company is executed. Also, MAX is disrupting the transportation sector with the planet’s needs at the heart of our endeavours. We launched our electric vehicles, notably the M3 bike, which is presently the most advanced electric bike in Africa.
For the next 3 - 5 years, we plan to replace a minimum of 50% of the commercial internal combustion engines (ICE vehicles) in Africa and other emerging markets with EVs.
Also, these are some of my favourite books now:
Fun fact
Each time we have a Champion share about how MAX has improved their lives, and that of their families. How their income has increased by 3x, 5x or more. These are the moments we live for.
Here’s a fun fact- globally Africa contributes less than 2% of the global carbon emissions, with the main culprits being Europe, America & Asia. Unfortunately, Africa is one of the most vulnerable continents to the negative impact of climate change.
The bottom line is we have a role to play because we have a lot to lose.
Where can we go to learn more?
Twitter- @maxdrive_ai
LinkedIn- MAX
Website- www.maxdrive.ai
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Thanks for reading and see you soon.
Kamso.