Digital Mobility Solutions (Pvt.) Ltd, which owns PickMe, Sri Lanka’s homegrown ride-sourcing app, is likely to go for an initial public offering (IPO) after a final round of private equity funding, signalling the entrance of the new generation tech start-ups to the Colombo Stock Exchange (CSE).
“We’re going for a fourth round of funding and after that we’ll go for an IPO,” PickMe Chairman Ajit Gunewardene told Mirror Business on the sidelines of a press briefing held to signify PickMe partnering with Hatton National Bank PLC to facilitate cashless rides.
Gunawardene, who is the largest shareholder of PickMe, is no stranger to the CSE, being Deputy Chairman of Sri Lanka’s largest conglomerate, John Keells Holdings PLC.
He said that PickMe, which started operations in June 2015, is expecting the number of rides taken to increase from two million in the past 12 months to four million in the next 12 months and revenue is expected to triple from Rs.2 billion to Rs.6 billion in the same time frame.
Gunawardene said that the fourth round of funding, which would be utilized for a promotional campaign to attract more driver registrations with the platform, would see this growth doubling.
PickMe had raised Rs.315 million in funding over the past 12 months.
The pull towards trendy e-commerce apps and word of mouth, especially among millennials, has been enough to create excess consumer demand for the platform, which has prompted PickMe to concentrate its efforts on recruiting more drivers.
“We have half a million downloads and we’re hoping to increase it to 1.2 million in the next 12 months. We have seen 2,000 daily downloads of the app in recent months, without any advertising,” Gunewardene said.
He added that the aim is to increase the current number of registered PickMe drivers to over 17,000 over the next 12 months.
The app offers consumers the choice of rides from three-wheelers, Nano cars, mini cars, cars and vans, with three-wheelers, which create the largest volume, mainly being centred in the Colombo District, with expansions in the Kandy District as well. Sri Lanka currently has over one million three-wheelers registered.
PickMe services are priced slightly below the market prices, giving the service an added attractiveness.
“Each time we bring in one PickMe vehicle, we take four off the road. It reduces the need to own a vehicle. It’s silly to spend on a depreciating asset than to pay per ride,” Gunawardene said.
The oil prices are expected to appreciate this year and the Sri Lankan government has increasingly been targeting vehicle imports for tax collection, reducing the affordability of a personal vehicle.
Gunawardene added that PickMe solves one of the big commuting problems in the country.
It remains to be seen how effectively or to what extend the government will implement its proposed modern public transportation system—given the shortcomings in the government’s investment plans in recent years—which could have some impact on PickMe’s operations in the long term. (CW)