🚨Investment Alert: Tikpay
Company: Tikpay
About: Tikpay is disrupting the global transportation payments industry in developing a unified platform and service to better handle ticketing, payment transactions, back-office operations alongside major transport operators in digitizing and consolidating on what is currently a fragmented industry.
Stage: Pre-seed
Location: Australia
Leadership: Michael Walters, Belinda Ralston, Simon O’Connor
Co-investors: AfterWork Ventures, Black Nova Capital, Func Ventures, Investible
Transport has a Payments Problem
If you have ever traveled abroad, whether it be taking a vacation, visiting friends in another city, going on your honeymoon etc., you probably would have taken a variety of transport systems to get around, be it a bus, regional trains, tramways, metros, ferries, e-scooters, ride hails or taxis.
Picture this, you’re on this amazing European tour and you have just landed in London as your first stop and use the Tube (London Metro) to get around the city. You then need to visit a friend in the countryside and take a bus (on a different network) - all the time using your credit card. The next day, you take the rail (Eurostar) to Paris for a weekend trip - and then realize that the ticketing and payments systems in Paris are different from those in the UK - and you can’t use your credit card to tap in and out.
You’re now carrying multiple transport cards for different regions, paper tickets, a variety of mobile transport apps, and have no idea how much spending has gone into your transportation costs.
The entire global transportation sector is currently embarking upon a transformation and the pain points described above are just a tiny example of how fragmented the sector has become.
To top it all off, inefficiencies in costs, time and even security are becoming more problematic for operators - from the pressures of increasing urbanization, more and more transport options, growing digitization, data privacy policies, and obscurity are coalescing all at once leading to a push towards modernization and consolidation.
As we embrace the digital age, commuters are seeking more seamless, convenient, integrated and data-driven ways to pay, monitor and manage their transport experience. The same push is also coming from the transport authorities as they seek to remain relevant alongside Uber, Tier and other disruptive and increasingly frictionless transport options.
So where to from here?
Enter tikpay
tikpay is solving this exact problem.
We’re excited to announce that we’ve joined tikpay in their pre-seed round alongside Afterwork Ventures, Black Nova Capital, Func Ventures, Investible and top-tier angels.
The tikpay team are tackling these challenges with a vision to create a unified platform and service that seamlessly integrates with various transportation modes - offering users a frictionless experience, while optimizing back-office efficiency for transportation providers that will ultimately assist both the commuter and operator to make more effective data-driven decisions around the future of transport.
The Team
We connected with Michael (CEO) through one of our well known fellow investors who raved about how they were excited about tikpay and what they were building.
They recommended we connect with Michael given our mandate to invest in founders disrupting traditional industries.
Eventually we got onto a call with the team and understood immediately what they were trying to solve and also the strong pedigree they had to execute on this.
However, we also knew and had no reservations in stating that this was a herculean task, but appreciated the potential impact something like this could have on mobility given the right team and foundation.
Michael, being a previous founder himself of a payments company in the transport space, but also highly connected with operators across the UK and Southeast Asia, gave us conviction on his ability to put together a solid team of operators.
Coupled with his insights and experience into such a unique niche of the industry gave us the confidence to support them on this journey.
The Opportunity
Here’s why this is important.
Urbanization. Regardless of what others say about population collapse, it is undeniable that there are 8 billion people living today (2023) on this planet. A big chunk of them are living in densely populated urban areas where good, reliable and efficient transport infrastructure is key. As more people flock to the cities for work, education and to raise their standard of living, there will be a push towards modernizing this sector to account for the uptick in demographics.
Public transport over cars. Singapore has declared that as part of their 2040 Master Plan, they are currently working to develop a ‘45-minute city, 20-minute town’ mandate such that anyone can get into the city in under 45 minutes, and any other town in under 20 minutes through effective public transport infrastructure. Other cities are following suit in their own way.
Digitization. With the rise in contactless payments and mobile ticketing, consumers are demanding such technologies be the default and it’s forcing laggard transport operators and authorities to play catch-up. On the flip-side, operators are also seeing the benefits of this transition with greater data visibility and insights into making more informed decisions while also saving costs and improving efficiency. For example, Hong Kong Tramways now accepts more payment methods on-vehicle / platform than any other transport operator globally - reflecting traveler demand for greater convenience.
However, with opportunities, comes inherent challenges:
The lack of interoperability between different payment and ticketing systems
The security of payment data: Public transportation agencies need to ensure that payment data is secure and protected from fraud.
The cost of implementing new payment systems: The cost of implementing new payment systems can be a barrier for some public transportation agencies.
The good news is the team are aware of such challenges and understand that this is not an overnight task, but will take time and when it does work, it will have a lasting and exponential impact on the sector.
Our Conviction
We are supporting the team because of four key traits we have identified;
Team pedigree. As already mentioned, the team has the skills, background, network and experience to guide this vision into a reality. But, they also have the ability to adapt and overcome hurdles. The product may change in the future, but the team’s culture and dynamism is steadfast and is the foundation of the company.
Scalable solution. Being an entirely software driven platform, the team are able to deploy, test, validate and update such services quickly and seamlessly on a global scale. Operationally, there will be opportunities to partner with folks on the ground across different regions allowing for relatively quick expansion and access to existing operators. The plan is for tikpay to become a turn-key transport solution provider with their partners.
Global product from day one. This is a global problem and needs addressing with many countries either thinking about or already beginning the transition towards a unified and digital payments infrastructure for transport. It’s more of a question of when rather than if this will happen, and tikpay want to be a key player during this phase.
Disruptive industry. The global public transport space is being put under the spotlight with pressures from factors of urbanization, digitization, population growth and much more. The next decade will see a paradigm shift from how it operates today and for this reason, disruption is inevitable.
Traction
The team are already engaged with various transport authorities and operators in Australia, Europe and Southeast Asia. Moreover, they are also engaged with payment schemes around sales, product and direct technical integrations, including direct to issuer connectivity.
The Future
As we look ahead to the future, it's evident that the transportation ticketing and payments landscape is on the brink of serious transformation.
Our investment in tikpay underscores our commitment to driving innovation and shaping the future of payments in transport.
By seamlessly integrating payment options across various transportation modes, we are not only making life more convenient for consumers but also promoting sustainable and efficient travel.
We are eagerly anticipating the transformative impact this will have on the future of transport.
Metagrove Ventures is an early-stage investment venture capital fund, focused on supporting founders and companies who are building the future of industry by creating inflection points in the market.
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