Q&A: eBee boss aims to build a cycling culture in Kenya

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Kenya and the Netherlands don’t share many similarities. For one, cycling is a fundamental part of life and transport in the Netherlands. In Kenya, cycling was once a major mode of transport but has been replaced by motorcycles. Maarten Fonteijn, the Managing Director of electric bicycle company eBee, is Dutch. He aims to help cultivate a similar culture of cycling in Kenya. 

• In an interview with Mobility Rising, Mr Fonteijn said the company’s founders, who are Dutch, borrowed from Netherlands’ vast experience in cycling to establish the company. “I think part of that understanding of the Netherlands and how it (electric bicycle) works there has inspired the founders initially to test different models.” 

• Since its establishment in Kenya in 2021, the company has since expanded to Uganda, and is considering venturing into Tanzania and Ethiopia in future. 

More details

Coming from the Netherlands, are you an avid cycler?

Mr Fonteijn: I'm from the Netherlands. I've lived in East Africa before. I've run or helped set up a solar mini-grid business before in Tanzania. I lived for three years in Tanzania where I helped build a solar-powered mini-grid business. I'm from a cycling nation from the Netherlands. Recycling is a big part of who we are, what we do. And also in East Africa, I started cycling a lot. I went on a big trip with my dad and my brothers from Cape Town to Kilimanjaro. Even all the way up to the summit of Kilimanjaro. It took 60 days. I also set up a bike academy in Tanzania to look for kids to learn to cycle.

And in my personal vision, the bicycle is a very effective tool for people to increase mobility. It's a relatively low cost, low resource. The economy can really broaden the amount of your mobility. The regular bicycle. So, I've always believed in that. And in the Netherlands, we also show what kind of mobility needs it can fulfill. Most of the commuting happens by bicycle. Most people have a bicycle. But in the Netherlands, the infrastructure is also there. There’s a lot of cycling lanes everywhere. 

Cycling isn’t big here in Kenya. Can cycling be a solution to some of the transportation challenges we have?

Mr Fonteijn: I also went to India, where I also worked both in mobility and the textile space, leading a team of venture builders. And in Bangalore, it kind of prepared me to come back here because it's a very fast-developing economy and the average income is increasing.

So, even there I was cycling because I wanted to come on time for meetings. And then you see that it's the most effective way and the only way basically to measure how long your commute will take.

But also, Bangalore was a small town and it expanded very fast because a lot of tech companies came there. It really showed me that if economies grow and people just have in mind that they need to move faster by buying a car, the government can't keep up. We actually see, even in countries like the Netherlands, that the more highways built, the more cars will come and the more traffic jams will follow. It's such a smart thing to think of already before everyone has a car.

How can we make sure that people can also move around without all those cars? All the cars are being imported. A lot of the cars are not being used at full capacity. Most cars are with one or two persons.

So even just on the vehicle itself, there's so much emissions and pollution that's going around that is needed to get the vehicle on the road. And of course, the driving itself, you need to move that whole heavy vehicle around with all the emissions. So, if you look at an ideal mobility scene, people walk if they can. If they walk, a fresh walk, it's healthy, it's sustainable. The normal bicycle can be used for a little bit further distance.

But in places like in Africa where it's hot, where there's a lot of steep hills, also the normal bicycle is not ideal because you use a lot of energy. It's easy to maintain.

It has the benefits of a normal bicycle, but also the benefits of an EV. You can use locally produced solar to power it. You don't need a lot of energy. And local fundies (mechanics) can do most of the maintenance. 

eBee went through a reorganization at the beginning of this year. Can you tell us how and why that happened?

Mr Fonteijn: We initially focused a lot on B2C sales, we opened a lot of small outlets in Nairobi, but also a nice showroom in Mombasa. We also saw that the market here, you don't have a lot of people coming in, walking into your shop and then buying a bicycle. You need to understand it. You need to still try it.

But you don't have people just walking around and suddenly walking into a shop and buying a bicycle. We also realized that the setup that we had before wasn't adding too much on our business model. So that's when we decided to become a bit leaner.

And also what I just explained before, initially we thought Kenya would be the hub for East Africa. We wanted to set up an assembly hall that could assemble maybe 10,000 bicycles a year and then distribute it to Uganda, Rwanda, Tanzania, Ethiopia.

And then because of the practicalities we learned that actually all these countries want their own local assembly, it also didn't make sense to maintain that big infrastructure. So, we said, realizing what we've learned over the years, there's a long way to go. But also, we and our cost structure and the way we organize ourselves needs to be related to the business model. That's when the reorganization and restructuring happened. 

And now, more than six months later, we see it picking up. So we see we had our best month this year in August. We have some really interesting B2B partnerships that already started last month, one and some new in the pipeline.

With your shift to a B2B, can you say that the majority of your business is now driven by B2B customers compared to B2C clients?

Mr Fonteijn: Yes, already. But still, we serve B2C customers. They're very welcome here. We also opened this nice coffee shop here. We hope to still attract a lot of people that are active. Sales efforts will be more focused on B2B, but that can still result in, I mean, in the end, it's individuals who use the bicycles, right? So, we still work with financiers, with sales lead generators, with employers to make sure that we can have favorable financing plans for those individuals.

We see that for commuting, for example, it can be a very good solution. People can save a lot of cost and hassle and time. In rural areas, we see that big farms can make very good use of the bicycles and also their employees. Delivery riders still benefit a lot, but we will focus on that mainly with our own fleet. But of course, if delivery riders need a bicycle, they can still come in and buy one. We still think that purely for deliveries on short distances, it's still more favorable than other vehicles. 

What is your sales model?

Mr Fonteijn: We have different models for B2B. One is rental. So, it's basically just a subscription. We handle everything including all wear and tear, all services, we just make sure they (customers) have a functional bicycle. Some customers just don't want asset ownership. They just want a working bicycle. So, across the two countries, we have almost around 300 subscriptions.

It's a B2B relationship. We plan regular visits to maintain. Sometimes if something cannot be fixed immediately, we just swap the bicycle. So that's one B2B model. Then we just do direct sales B2B. And what we call B2B2C is we work with employers and financing companies to help their employees use the bicycles.

How is your performance in Uganda?

Mr Fonteijn: We started there much later, last year. Also, our headquarters is in Nairobi. So, some of the procurement strategy and finance functions are also being done here. We support them there.

What we see really gaining traction there is the rental business. It seems like Kenyan businesses often do prefer to have the ownership of assets. If they see that the rental over time results in an expense that is larger than the actual capital requirement to purchase an asset, they will purchase. 

What we see often here is that businesses subscribe for a subscription. And after a few months, once they realize the value the bicycles add, they will buy it. Whereas in Uganda, I don't know if it has to do with culture or with just the peace of mind, not having assets on your balance sheet.

Companies are very keen to just rent. The rental business is really growing and is much bigger there even than in Kenya. Sales are a lot lower. So here, our main revenue model is sales. And there, our main revenue model is rentals. And the fleet is also picking up there, even though it's more competitive and there's more platforms and more deliveries overall in Nairobi compared to Kampala.

And also in Uganda, we've also worked together in partnerships to also explore smaller towns. We are already present in Jinja. 

The high price of electric bicycles has been an issue for customers. What are your prices, and do you work with any financing companies?

Mr Fonteijn: The Nyuki is a little bit more expensive than the EBX, maybe because of the cargo, the big carrier it has. The EBX is a little bit more agile, a little bit cheaper. The Nyuki is KES 125,000 ($970) and the EBX is KES 105,000 ($815). We are working with two financing companies and there's two more in the pipeline. Probably we will start working with them this month. And now going forward, working also with employers, it will ramp up probably the proportion that will be financed.

But this year, we've seen quite a stable direct purchase amount compared to the financed ones. We sell our bicycles, we rent them to businesses, and we operate this fleet of delivery riders. So that fleet consists of independent contractors.