Justin is one of the many entrepreneurs who will participate in the Global Forum on Innovation and Entrepreneurship in East London (May 28 -30).
Anyone who relies on public transportation has likely been there. Standing on a platform, staring at a clock, double-checking the schedule. ‘The train should be here by now…’For riders of Metrorail – the largest formal transportation system in South Africa – the problems were particularly acute, with chronic delays in service and a serious deficiency in commuter communication leading to protests and threats of arson.
Justin Coetzee experienced these challenges firsthand in 2011, when he started to use public transport in Cape Town to commute to work. A transportation engineer by training, he saw an opportunity and last year launched GoMetro. The mobile-based public transport information system provides commuters with real-time updates on delays so they can opt to take alternative transport or make other arrangements. The service was endorsed and accepted by Metrorail, which operates commuter rail services in the major urban areas of South Africa, and has quickly grown to serve more than 300,000 regular commuters.
We recently caught up with Justin to learn more about GoMetro, and his experiences starting the company.
infoDev: What achievements has the company reached?
Justin Coetzee: GoMetro launched in September 2012, and is the first real-time public transport information system in South Africa. We are processing 30,000 service requests per day, and have also secured additional services to bring onto the platform (such as Metrobus, Rea Vaya and Golden Arrow). Updates are generated every 15 minutes from three Metrorail Control Centres in Cape Town, Johannesburg and Pretoria. Commuters are kept informed along their way, giving them an effective planning and operational tool.
We are currently a team of six, and are generating revenue. We secured an initial R500,000 (about $54,000 USD) advertising sponsorship for our launch, and have begun establishing multiple revenue streams for the product as uptake has increased.
infoDev: What hurdles did the company face to get to where it is?
J.C.: A lack of mobile development skills in South Africa was a major challenge that the company has faced in developing our solution. Established mobile skills are very expensively priced, so prototyping the first versions of mobile products needs to be produced in-house or through a specialized incubator likemLab. Only once the baseline solution was developed with the cheapest resources available were we able to engage third-party developers at a consulting rate. At this point the product was well defined, and so the risk was much lower to us.
We have also experienced a serious challenge in raising seed funding and securing our first round of financing. There are limited seed funding opportunities in South Africa. We are now trying to raise our first round of venture financing with a product in the market, and are finding that emerging market equity is very risk-averse. As a result, valuations are too low.
infoDev: How did infoDev or one of our partners help the company overcome difficulties?
J.C.: The mLab in Pretoria has provided an incubation facility where we have been able to connect with other mobile developers, and learn a lot of development skills and best practices to apply to our product. We have been able to work with other mLab incubatees to develop mobile apps for us, which has allowed us to accelerate our product development.
GoMetro was also fortunate enough to secure a seed round in the form of being a winner of the Gauteng Innovation Competition. This funding assisted us in launching the service in another region, and proving the product in the market.
infoDev: What are the future plans for the company?
J.C.: GoMetro is planning to create real-time data-streams for all public transport modes in South Africa. The current platform and our app infrastructure provides a solid base for future innovation and experimentation.
We are also planning to expand into South America, Australia and other emerging regions over the next two years, using mobile services as a cost-effective way to improve the public transport commuter experience. It’s a universal challenge!
infoDev: What are you hoping to get out of attending the Global Forum in May?
J.C.: We plan to showcase our scrappy spirit to potential funders at the Forum who may be interested in supporting the acceleration of our South African platform, as well as our push into other emerging markets. We are hoping that emerging market funders at the event have more of a risk-appetite than the South African equity market.
We are also hoping to be a case-study for technological entrepreneurs, that building mobile social solutions is very easy and within the reach of existing development skills. We would love to see more mobile solutions emerge that tackle serious social issues.
To learn more about GoMetro, please visit www.gometro.co.za