Corporate-focused e-hailing platform LULA acquires Zeelo’s South African, a US-born staff bus-sharing startup. Neither company has yet to disclose the transaction details for the cash-only deal.
LULA plans to use Zeelo’s extensive market network of more than 18,000 riders to further expand across South Africa. Until its acquisition, Zeelo claimed to have completed over two million rides yearly.
Zeelo, which entered the South African market in 2019 and raised total funds of $33.6 million by August 2023, is leaving the country to focus on its US, UK, and Ireland markets.
Commenting on the mobility company’s exit, Sam Ryan, Founder and CEO of Zeelo, said the decision to leave the region was challenging.
“We are excited to support the transition of our customers and suppliers to the LULA platform,“ he added.
Per the Provincial reports of the National Household Travel Survey of 2022 published by Statistics South Africa, transportation makes up the highest work-related expense for South Africans.
A recent National Household Travel Survey (NHTS) revealed that workers in South Africa spend an average of R2,180 ($121) when using their cars and R960 ($53) if it’s taxis.
Uber for Business, MoveInSynch, and LULA, are platforms that currently enable employers to assist their employees to cut these costs for their employees.
What this acquisition means
Following the acquisition of Zeelo, LULA, with more than 1,000 registered drivers and shuttle fleet operators as well as operations in five South African cities, hopes to increase its market share in the sector.
LULA, established in 2018 by Velani Mboweni (CEO) and Xabiso Nodada (Head of Product), claims to have completed up to 700,000 rides for more than 380 businesses.
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LULA does not own the vehicles it uses. Instead, like Bolt and Uber, the e-hailing platform partners with individual drivers and shuttle fleet operators to offer the rides for a commission that falls anywhere between 20% and 40%.
Mboweni explains that the revenues generated from its Zeelo operation will help LULA to become cashflow positive, enabling the company to expand successfully.
