LULA, a ride-sharing platform for office workers, has acquired the South African subsidiary of US-based staff bus-sharing startup Zeelo for an undisclosed amount. Both companies declined to disclose the specifics of the cash-only deal. 

Zeelo, which launched in South Africa in 2019 and has raised $33 million, is leaving the country to focus on its US, UK, and Ireland markets.  Until its exit, Zeelo completed more than 2 million rides annually in South Africa. LULA will use Zeelo’s footprint of over 18,000 riders to expand across the country. 

Transportation is the biggest work-related expense for South Africans, according to data by Statistics South Africa. Workers spend an average of R2,180 ($121) when they use their cars and R960 ($53) if they use taxis. Platforms like Uber for Business, MoveInSynch and LULA currently enable employers to reduce this cost for employees.  With the acquisition, LULA hopes to gain a larger market share.

Founded in 2018 by Velani Mboweni and Xabiso Nodada, LULA operates in five cities in South Africa and claims to have completed 700,000 rides for over 380 companies. The company also has over 1,000 registered drivers and shuttle fleet operators. LULA does not own the vehicles but partners with individual drivers and shuttle fleet operators to provide the rides for a commission ranging from 20% to 40%. 

Through the revenues generated from Zeelo’s operation, Lula will also become cashflow positive, allowing it to “scale smart, rather than scale fast” according to Mboweni.

“The decision to exit the region was a challenging one [but] we are excited to support the transition of our customers and suppliers to the LULA platform,“ said Sam Ryan, founder and CEO of Zeelo.