In a landscape where international ride-hailing giants are investing millions to secure their positions in Africa’s fiercely competitive tech environment, Dubai-based Yango Group is adopting a markedly different strategy.
This year, Yango has announced a substantial investment of $150 million aimed at expanding its presence in Africa. Rather than entering the already saturated markets, the company is focusing on secondary cities and often-overlooked regions of the continent.
With a current network of 1 million drivers across 35 countries, Yango’s African strategy intends to add 10 new markets by year-end, targeting an ambitious growth rate of 60% across the continent.
Avoiding Unsustainable Competition
For many tech companies eyeing expansion in Africa, the approach has been largely predictable: launch operations in the “Big Four” — Nigeria, Egypt, South Africa, and Kenya. However, this concentration has fostered an unsustainable business environment, as noted by Yango Africa CEO Adeniyi Adebayo.
Adebayo pointed out that the familiar pattern leads to extensive capital inflow into these primary markets, resulting in a detrimental “race to the bottom.” He asserts that, instead of engaging in costly subsidy wars to attract gig workers, Yango adopts a business-to-business (B2B) partner model.
“We don’t work directly with drivers in any market; we collaborate with transportation operators,” Adebayo explains. This strategy enables Yango to connect with locally established transport networks, thereby mitigating high customer acquisition costs that often challenge the growth of gig economy platforms.
Targeting New Growth Markets
Yango is placing significant emphasis on French-speaking West and Central Africa, in addition to exploring opportunities in smaller southern African markets such as Namibia, Botswana, and Mozambique. Adebayo highlights the enormous potential in the region, noting that, when analyzing the top 50 cities in West Africa alone, Yango has only “barely begun to scratch the surface.”
Navigating Environmental Challenges: Embracing Electrification
However, such expansion is not without its challenges. According to a recent KPMG advisory report, ride-hailing operators across Africa are grappling with considerable macroeconomic headwinds. These include volatile currency fluctuations, stricter local regulatory frameworks that impose vehicle caps and licensing fees, and rising fuel prices that have been further exacerbated by geopolitical tensions in Iran — currently consuming up to 25% of total fare revenue.
To shield partners from the burden of escalating fuel costs, Yango is accelerating its transition to clean energy. The company is heavily investing in vehicle electrification, starting with plans to deploy 1,000 electric vehicles (EVs) in Abidjan, Ivory Coast, in the current year.
By integrating an asset-light operational approach with a robust pivot towards EV usage, Yango’s $150 million investment could potentially reshape the conventional strategies for expansion in African mobility.
