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Wednesday, 30 May 2018 02:03 - - {{hitsCtrl.values.hits}}
By Nisthar Cassim
Digital Mobility Solutions Lanka Ltd., which operates PickMe, has completed Rs. 1 billion in cumulative capital-raising recently with the infusion of the biggest chunk worth Rs. 693 million, which will be utilised to venture into high potential food delivery and logistics.
The latest fundraising has attracted the World Bank’s private sector investment arm IFC Group to take up Rs. 385 million in what was its maiden venture capital investment in Sri Lanka.
In previous fundraisers, PickMe had garnered Rs. 44 million, Rs. 100 million and Rs. 170 million. As per the latest capital raising, PickMe’s post money valuation is estimated at Rs. 12.7 billion, which qualifies it to be among the Top 50 listed companies by market capitalisation.
In a show of continued confidence in the organisation’s future prospects, the balance money (Rs. 308 million) of the Rs. 693 million capital-raising had been contributed by existing investors.
Among them are PickMe’s Founder Chairman Ajit Gunewardene and family, Ruchi Gunewardene, Interblocks Holdings Ltd, Lanka Orix Information Techn-ology Services Ltd, H Capital Ltd. of the Hirdaramani Group, Amaliya Ltd., of the Amalean family and three other high net worth investors.
“Based on the evaluation of the performance of the company, the investors in this round expect the company to achieve a valuation of 5X (over Rs. 60 billion) in three years,” says PickMe founder Chairman and investor Ajit Gunewardene, of JKH fame.
“We are confident based on our strategies that we can achieve a value of at least 15X in six years if not earlier. This would amount to a valuation of Rs. 200 billion. We believe we will be amongst the top five market cap companies by then,” he told the Daily FT.
Digital Mobility Solutions plans to list on the Colombo Stock Exchange by mid or late next year.
The company, whose founder and CEO is Jiffry Zulfer, completes three years in June and has improved its profitability, with the last financial year’s EBITA figure being over Rs. 100 million.
Gunewardena said fresh capital would be channeled into PickMe’s foray into last mile food delivery including for “Mom-and-pop” enterprises, home-based entrepreneurs and self-employed individuals and logistics, such as goods transportation especially for SMEs.
PickMe’s successful crowd sourcing model will be adopted for these new ventures as well. For the food delivery service, which is to be rolled out in the next six months, a network of 1,000 mo-bikes is envisaged.
“We are committed to democractise transportation in Sri Lanka, providing affordable and comfortable mobility as well as to put the existing vehicle and mo-bikes fleet to productive use,” Gunewardene emphasised.
He said Sri Lanka would continue to grapple with its inadequate road network and exploding vehicle population.
“The only solution is not to add more cars but to use the existing car stock more productively. We believe it is everybody’s right to have access to comfortable, convenient, cost-effective transport. However, it is not efficient neither will it be possible for everyone to own a vehicle. Owning and operating a vehicle is one of the most inefficient uses of capital,” Gunewardene pointed out.
In addition, it creates undue pressure on national resources. “We are democratising transport by ensuring every citizen will have a vehicle of their choice when they want it where they want it,” he reiterated.
Speaking on upcoming services, Gunewardene said the objective was to provide an efficient and cost-effective transport solution for businesses both small and large.
“Businesses can concentrate on their core activity. We will provide mobility for their goods and services. Today the delivery of goods is a major bottleneck due to transportation inefficiency. We are solving this pain point,” he said.
“Our view is that with highly efficient and productive transport we can add basis points to the GDP of the country. We can provide a distribution capability to the SME sector which is unavailable today. This creates access to markets which were earlier not available to the SME sector,” Gunewardene emphasised.
According to him, PickMe, which is a success story of a digital economy model, is creating new economic activity using technology as a tool. “New economy companies create value not by taking away market share but by creating an entirely new market, hence the ability to grow exponentially,” he pointed out. “It is very unlikely that any of the old economy companies can grow at this exponential rate. This is why new economy entities will lead in value and wealth creation in the future. This has happened in other economies around the world. It will happen here too,” Gunewardene said.
