[South Africa] FlexClub raises $1.2M, partners with Uber Mexico
South Africa’s startup FlexClub has closed a $1.2 million seed round led by CRE Venture Capital.
According to a report published by TechCrunch, FlexClub which matches investors and drivers to cars for ride-hailing services will use the financing to add team members and expand off the continent through a partnership with Uber Mexico.
FlexClub touts itself as a “gig economy investment platform” that is creating new asset classes in emerging markets, according to the chief executive and co-founder Tinashe Ruzane.
FlexClub currently operates in South Africa and has relationships with several car dealers. It generates revenue by charging a percentage of the rental income to investor club members. Those fees generate monthly, fixed-rate interest income for the investor. The driver has the option of buying the car after the 12 months, with a descending purchase price over time.
“We think there’s a transformation of urban mobility in frontier markets…from Uber to scooters to motorbike markets,” says CRE Venture Capital partner Pardon Makumbe. “There’s also a massive young international employee population that is ready to work for Uber or other fulfilment and logistics companies…but the price point to own the producing asset, i.e., a car, can be prohibitive,” he said.
Nairobi based Savannah Fund and South African angel investor Michael Jordaan joined lead investor CRE in the $1.2 million round.