Egyptian ride hailing startup Ousta has raised a $1.25 million investment, five months after its launch.
The bridge round was funded by undisclosed local and UAE investors and would be followed by a “another significant round,” said Ousta chairman and cofounder Nader El Batrawi in a statement on Sunday.
“The funding will be used to develop our team, increase availability to satisfy the growing demand of our customers, which will accelerate our penetration and expansion in all main cities in Egypt,” said CEO and cofounder Omar Salah.
“[The sharing economy] fundamentally helps the cities we work in by creating thousands of jobs for both genders, improving household incomes, optimizing personal transportation, saving customers’ precious time, and also decreasing CO2 emissions, which improves our air quality.”
The company, whose name means ‘masterful driver’ in Egyptian slang, said in a statement that it was operating in 11 cities and seeing 30 percent week-on-week growth, and the funding would also support a regional expansion plan.
Ousta competes against Careem and Uber in Egypt but in an interview with Wamda, El Batrawi said their point of difference was working in cities other than the big two - Cairo and Alexandria - and offering rides at much cheaper rates. They offer rides for as little as 50 cents and do not use surge pricing.
Nancy Farag, CEO of Axia Capital which advised the investment consortium, said the round would mainly be used to maintain the business while negotiations for a larger round continued.
El Batrawi also founded the professional network Jobzella. Salah was previously a manager at Nestle Waters.
The funding round for Ousta comes as Egyptian parliamentarians are looking very closely at the startups competitors, Careem and Uber. A parliamentary committee has called for an end to both surge pricing in Egypt and the fee charged to users when they cancel rides, on the grounds that it was “illegal”.
In August Uber did, however, recommit to a pledge to invest $56 million in Egypt, saying it now had 30,000 Cairo drivers on its books.
Feature image via Ousta.