Ride Hailing App Little set to Enter Ethiopia Market

Kenyan ride-hailing firm Little is expanding to Addis Ababa joining Safaricom and several other Kenyan firms in the race to crack the Ethiopian market that has so far remained closed to foreign firms.

Little chief executive officer Kamal Budhabhatti told Business Daily the firm will invest $5 million (Ksh540 million) in the next five years, with plans to inject an additional $5 million based on its growth projections.

The company, which competes with global players Uber and Taxify in Kenya, Uganda, Zambia, and Tanzania, will start Ethiopia operations this months.

It will recruit 2,000 drivers targeting corporates and individual customers with plans to later launch food delivery, and outside Addis Ababa in the country of over 100 million people.

“Ethiopia has always been on our sight,” Mr Budhabhatti said in interview yesterday.

The digital taxi firm becomes the latest Kenyan company to enter Ethiopia days after a Safaricom-led consortium received a telecommunication operator licence in Ethiopia, setting the stage for Kenya’s largest telco to start operations in the market of over 100 million people.

Ethiopia’s award of a new telecoms licence paves the way to open the market to international investors for the first time, a key part of Prime Minister Ahmed’s economic strategy.

“When we saw Safaricom heading to Ethiopia, we got the courage to get there. It is a large market and we see an opportunity to extend our services there,” said Mr Budhabatti.

Business Daily learned that Little will partner with State-run Ethio Telecom which recently launched a mobile money financial service dubbed telebirr.

“We have some great Ethiopian partners. We felt that it is a very large market, and for us to succeed there, we need to work closely with Ethiopian companies who would bring a wealth of local and cultural knowledge,” said Mr Budhabatti.

Several Kenyan firms have been eyeing the Ethiopian market for years due to the country’s huge population. The Kenyan firms are attracted by the growth potential in that market, whose 100 million population means a huge untapped business opportunity. Its population, which is the second largest in Africa after Nigeria, offers immense opportunities for business.

Ethiopia has kept foreign involvement in the economy at a bare minimum but its ongoing economic reforms look set to strengthen investor sentiment.

The horn of Africa nation has also consistently registered robust economic growth, averaging 10 percent in the past five years.

Besides telecommunications, the Ethiopian government last year announced plans to open up the aviation sector, the State logistics firm and electricity monopoly to private investment.

Shares in sugar factories are also being sold and tentative steps towards opening up the financial sector have been taken.

The Kenyan firms eyeing to crack the Ethiopian market include insurer Jubilee as well as lenders, KCB, Equity, Cooperative Bank and Stanbic.

Little says through its application one can access the delivery services, transport, doctor services, corporate services, and the wallet which enables one to send money, buy airtime, pay bills among other functions.

Escalating armed conflict in Ethiopia’s Tigray region pitting Tigrayan forces against the Ethiopian military and its allies from Amhara and the neighbouring nation of Eritrea has raised concerns over the investment climate in the country.


Source: The East African

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