Kovi: Driving job growth in ride hailing and mobility by unlocking value from underutilized workers and assets
Ride hailing apps like Uber, Lyft, and Didi Chuxing have unlocked an economic opportunity with the push of a button on a smartphone. Millions of people can now open an app and earn income by taking passengers from point A to point B. But participation in the ride hailing economy is predicated on the ability to have access to a car.
In countries like Brazil, participation in the ride hailing economy is hindered by the fact that car ownership is significantly less widespread. Only 20% of Brazil’s population owns a car due in large part to a car’s purchase price being 40 times the average Brazilian’s monthly wages. Compared to the US, where a car’s purchase price is only 12 times an average monthly wage, and it’s no surprise why car ownership in Brazil is at 20% while car ownership in the US is at almost 90%.
The car remains at the core of the ride hailing business model. Without access to a car, the driver is unable to participate in the income opportunity that the ride hailing economy provides. In the zero-sum game of ride hailing, where driver acquisition and retention is critical to their success, ride hailing companies are missing out on a huge opportunity to add drivers to their platform.
It also means that Brazil is missing out on a significant economic benefit. According to a recent McKinsey study, there is upwards of $69B of potential GDP growth in Brazil if they were able to foster the development of gig economy and job platforms and encourage more underutilized and unemployed workers to join this workforce.
Solving for the lack of car ownership in Brazil means that there is the ability to unlock economic opportunity for a large pool of potential drivers who otherwise would be unable to participate in the gig economy.
That’s why we are so excited to back Kovi, a managed car rental marketplace for on-demand drivers, which will provide economic opportunity for its customers and fill a critical piece of the urban mobility value chain for ride hailing companies.
In Kovi’s marketplace model, both sides benefit. Kovi’s platform enables drivers to participate in the ride hailing economy by providing them with the ability to lease a car, and in turn help them grow their income and improve their financial lives. Kovi enables ride hailing companies to access more potential drivers for their platform as Kovi’s rental marketplace allows previously underutilized drivers to gain ready access to cars and participate on ride hailing platforms.
The Kovi team has the necessary industry experience to build a meaningful and impactful business in Brazil and across Latin America. Founders Adhemar Milani Neto and Joao Costa were integral parts of the leadership team at 99, a Brazilian ride hailing business that was acquired by Didi Chuxing for $1B.
Adhemar is the exact type of founder with whom we seek to partner. He’s smart, thoughtful, data-driven, and independent, but also highly collaborative. Adhemar and team have deep domain expertise in their market, which gives them a well-founded conviction for how they believe this market will evolve. Most importantly, Adhemar is able to channel his passion of providing economic opportunity into focused action, building a mission-driven company that makes a positive impact on people’s lives.
We are thrilled to partner with the Kovi team and a stellar group of investors, including Monashees, ONEVC, Kevin Efrusy, Y Combinator, Maya Capital, SOMA Capital, and a number of influential and thoughtful angel investors, on one of the largest seed rounds in Brazil to date of $10.5M USD to help Kovi achieve their vision of being the essential services provider of choice for on-demand drivers in Latin America.
We believe strongly in unlocking economic opportunity and we see Kovi as the vehicle to help on-demand workers in Latin America build income and gain financial security so we are excited to ride shotgun with Adhemar, Team Kovi, and our fellow investors to help millions of Latin Americans access the ride hailing economy.