Why We Invested: Teliman
Africa has a large and rapidly growing population of young people. And the reality is that most of these youth cannot find secure and stable job opportunities. Between 10 to 12 million African youth enter the workforce each year, but only 3.1 million new jobs are created, leaving millions unable to realize their full potential.
In Mali, a landlocked country in western Africa, the youth unemployment rate is higher than the total average unemployment (12% in the whole country and 32% in Bamako). Additionally, 73% of the economically active population work in the informal economy–meaning lower wages and no insurance or other social protections.
This is a big reason why we were excited about our investment in Teliman. Teliman offers unemployed and underskilled youth the opportunity to earn a decent living by becoming moto-taxi operators. Its a lease-to-own asset financing model and ride hailing service that creates impact on multiple fronts: 1) earning stable income that is higher than the minimum wage, 2) building credit and access to financial services, and 3) creating a pathway to own an asset that can generate income and help pave the way to increased economic resilience.
This investment was financed thanks to AFD’s support through the Digital Africa seed fund (learn more on the Choose Africa website). It was our first investment through this fund and our first in a West African-founder led company. Teliman is the perfect example of local entrepreneurs harnessing new technologies to create a new industry that solves multiple problems faced by their fellow citizens.
More about Teliman and why we invested…
Market Need
Africa has a large and rapidly growing population of young people searching for work. Between 10 to 12 million African youth enter the workforce each year, but only 3.1 million new jobs are created, leaving millions unable to realize their full potential. The consequences are pervasive and severe, and include poorer living conditions, conflict, and migration. Meanwhile, Africa’s commuters grapple with an increasingly inefficient and overwhelmed public transportation sector. This is perhaps nowhere more apparent than in Mali’s capital, Bamako, where a growing population is putting mounting pressure on the city’s road network. The daily commute for most is either prohibitively expensive (via taxi) or uncomfortable and slow (via bus or van).
The Teliman Solution
Launched in May 2018, Teliman is the very first motorcycle-taxi service in Bamako — offering a solution that is five times faster than vans and four times cheaper than taxis. Passengers can request rides through Teliman’s call center or via mobile app, which are assigned to the driver in closest proximity. The startup trains young people to ride the motorbikes and provides drivers with safety gear as well as licensing and insurance. Young people are also offered the opportunity to own the bikes. Drivers help pay towards their lease over a two-year period, at which point the bike is fully paid off and ownership transferred. The solution is threefold — Teliman is providing more efficient transportation for Malians in and around Bamako, while providing youth with a new route to income and the chance to own an asset. This goes well beyond “gig work” to provide youth with decent work that pays higher than the minimum wage and has a pathway to owning a productive asset.
Upon returning to Mali we were struck by the lack of road infrastructure in Bamako. Getting around was always a big hassle and something needed to be done. But, that something needed to be in accordance with local culture all the while bringing structural behavior changes. This is how we slowly ventured into a sustainable moto-taxi service, built around a strong leasing model that would not only solve the transportation issue but also contribute to creating jobs for unemployed youth. — Elay Maiga, Founder & CTO
Investment Rationale
Africa’s youth hold tremendous potential for increasing productivity and driving economic growth across the continent. But there’s a severe shortage of work opportunities. Investment in Teliman will help link Mali’s youth to greater opportunity to unlock their energy and productivity — combining asset ownership with access to employment to increase income and improve livelihoods. Our investment reflects the urgent need for more youth employment opportunities, the promise of technology, and the potential of this model to be scaled to create more sustainable work options in other countries where we work. The shocks created by the COVID-19 crisis highlights the need for solutions–like this one– that are actual pathways to growth for the underserved.
