Iranian Ride-Hailing Firm Taps Local Investors

EghtesadOnline: Iran’s ride-hailing firm TAP30 has signed a $7.3 million investment agreement with two subsidiaries of Bank Saman.

News ID: ۷۴۷۰۵۷

14 April 2019

In return for a stake in the online taxi company, Saman Electronic Payment (SEP) and Saman Investment Development Company will invest jointly in the taxi company.

SEP is listed on the Tehran Stock Exchange and the agreement was reported on the Comprehensive Database of All Listed Companies (Codal.ir). The TSE said the agreement and its financial details will be reported on its website.

Iranian online firms rely on foreign investors like South Africa’s MTN and Germany’s Rocket Internet for expansion. As US hostility and economic sanctions force foreign investors to steer clear of the Iranian market, local companies in droves are turning to domestic partners, Financial Tribune reported.

As per the agreement between SEP and TAP30, the electronic payment service provider is to receive 8.5% share in the online taxi firm. Details about the deal between Saman Investment Development Company and TAP30 are not known yet.

The TAP30-SEP deal was initially announced in March. In a letter to SEP shareholders, the company said the agreement has been signed between the two sides.

In an interview with news website Peivast, Milad Monshipour, the TAP30 boss, billed the agreement “beginning of a strategic partnership.”

The money invested by SEP in TAP30 is to be used for boosting the online taxi company’s growth and increase its share in the rapidly growing online taxi market .

Monshipour said TAP30 is planning a foray into diverse fields and new services, including online payment services. He did not elaborate, but observers say the introduction of an e-wallet service is on TAP30 agenda.

Tight Race

Over the past few years TAP30 has reported significant growth in its user traction and revenue. However, the company still lags behind its arch-rival Snapp, which is the leading ride-hailing firm and more popular with users and drivers.

Snapp and Tap30 respectively offer services in 68 and 15 cities. More than two million drivers work for the two companies.

Snapp too has been on an expansion spree growing its business into other services, including food and grocery delivery and a travel booking app. Snapp says its ride-hailing app is generating two million fares a day.

The investment by Saman Bank subsidiaries in TAP30 in addition to helping the company sustain its operations can help the firm expand the variety of its services.

The economic headwinds Iran has been facing after Washington imposed new sanctions last year have hurt the fortunes of local startups, including the online taxi firms.

As family budgets shrink, Iranians are forced to cut daily “unnecessary” spending. Many now see hailing an online cab a luxury they can no longer afford. With incomes declining the online taxi firms need to come up with new strategies to help weather the economic storm.