Serial investor and Chairman of Kazana Group, Addis Alemayehou, has partnered with Japanese entrepreneur Yuma Sasaki to set up clean tech startup Dodai in Ethiopia.
Dadai Ethiopia will provide affordable electric motor vehicles to Ethiopia’s gig workers as well as the general public.
To be operational in February 2023, Dodai promises to deliver the best electric two-wheeler vehicles available on the current market, with the models to be availed by the end of this year.
Addis, who was named in 100 Global Tech’s Changemakers list by Rest of the World (RoW), is one of the biggest cheerleaders for Ethiopia’s startup ecosystem.
His holding company, Kazana Group, holds stakes in more than a dozen early-stage companies across Africa, including mobile service provider Arada Mobile, streaming service Avetol, and Flex Towers, which delivers infrastructure for telecom providers.
On the other hand, his partner Yuma, who is the CEO of Dodai, has several years of experience working with several startups in Africa and Japan, led a commercial team at Uber, and has launched a sharing e-scooter service in Japan.
Who is Dodai?
Dodai was started a year ago in Djibouti by Yuma as a solar company with a pay-as-you-go payment system to equip low-income families as the country has extremely high electricity prices.
Dodai was able to equip more than 1,000 family members in the first six months. Using Djibouti as a base, Yuma was also preparing the launch of an urban E-mobility platform in Ethiopia.
“I have always been interested in Ethiopia because of the history, growth, and size of the market—even before I learned about the culture on the ground,” said Yuma.
After partnering with Addis, Dodai is on a mission to democratize access to simple and affordable mobility in Ethiopia, where the motorization rate is only 3–4%.
“Working with hungry and ambitious people like Addis is always exciting, but it’s also extremely important for me as a foreigner to have someone from Ethiopia who shares our vision to execute to solve the problems in Ethiopia,” said Yuma.
Dodai is currently recruiting key members, raising funds, and discussing with strategic partners how to launch it in 2023.
Within 3 years, its factory will employ around 200 employees, along with 2000–3000 collaborators such as sales agents, and part-time engineers.
However, in the initial stage, Dodai will target the growing gig economy of Ethiopia and its riders working in the delivery of food and packages.
“We would like mobility gig workers to experience the benefit of electric motors and more customers easily and, of course, make more earnings,” he added.
The startup is also working on providing loans for people who can’t afford to buy them in one installment. The application for the loan will be simple and online, with the Dodai saying, “It’s just a few clicks away from owning an electric two-wheeler.”
“We are partnering with key banks to provide loans to mobility gig workers. Details will be shared by the end of the year,” said Yuma.
The electric vehicles can be charged using standard 220-volt outlets and take between four and five hours to get fully charged.
“We will also set up battery swapping stations so that drivers don’t have to charge the battery by themselves, and we can create more jobs for battery swapping agents,” added Yuma.
Market
According to Fortune Newspaper, last year, nearly 10,000 electric vehicles (including semi- and completely knocked-down parts) were brought in for 44.3 billion birr, with China being the major source. This figure is more than double what had been shipped the year before, for 15.9 billion Br.
Local Players
Marathon Motors Engineering, cofounded by Olympic medalist and business tycoon Haile Gebreselassie, has been assembling electric cars in Ethiopia since 2019.
Green Technologies Ethiopia, is another private company working in the electric car space as well as other renewable energy alternatives.
A subsidiary of Shemu Group, a conglomerate comprising 15 companies, Green Tech Africa was incorporated with 1.2 billion birr capital.
Green Tech Africa, with a presence in Kenya, Rwanda, Tanzania, and Uganda, plans to import 5,000 electric cars in the coming five years and has imported over 1000 electric vehicles from China.
But the direct competition for Dodai Ethiopia is expected to come from Tom Electric Vehicles, which was incorporated four years ago. It assembles three-wheelers, minibuses, and scooters.
Tax Breaks
Two months ago, the Ministry of Finance made the sale of electric vehicles exempt from being subject to value-added tax (VAT) or excise tax.
Officials hope to see the tax privileges encourage the use and affordability of electric cars, which have steadily been gaining popularity over the past couple of years. Yuma applauds the move.
“It’s also meaningful in the context of Ethiopia because the country offers the cheapest and cleanest electricity on the continent, so it’s a win for everyone in the country in the long term,” he stated.
Forex Shortages
Car assemblers in Ethiopia are crippled by the shortage of foreign exchange. They often operate at less than 50 percent capacity. Dodai plans to overcome this by bringing dollars from abroad until the forex market is opened up.
“We’re not in Ethiopia for short-term profits. We are committed to long-term solutions to major social problems like access to affordable mobility and job opportunities,” said Yuma.
“This means that I, as CEO, need to show the potential of the Ethiopian market and hit each milestone with the Dodai team to be able to attract enough investment from international VCs,” he added.
Yuma is also developing technological solutions to improve the efficiency of cross-border logistics between Djibouti and Ethiopia.
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