Global Editions

Making a technology ‘unicorn’

by Mahrukh Sarwar

Mudassir Sheikha is the co-founder and managing director of leading ride hailing service Careem. After graduating from Stanford University and the University of Southern California, where he studied Computer Science and Economics, Sheikha spent a decade in Silicon Valley building technology startups. Prior to co-founding Careem, he worked at McKinsey & Company, where he advised clients on strategy and business building.

Based in Dubai, Careem has operations in over 100 cities in 14 countries in the Middle East, Africa, and South Asia. Earlier this year, the transportation network company was acquired by its rival Uber in a $3.1 billion deal, making it the first technology ‘unicorn’ to emerge from the region. MIT Technology Review interviewed Sheikha to find out about his thoughts on regional adaptability of firms and how to build a billion-dollar company.

How did you come up with the idea for Careem?

When co-founder Magnus and I were working at McKinsey there was a problem with corporate transport. The company was using different providers across various markets and the reliability was low. There was zero tech involved which meant that the receipts were all paper-based and there was no way to classify expenses, plus we’d have to go to the ATM and draw out money to give to the driver – the procedure was so manual that we thought, “It is the 21st century and this is how transportation is working?”

The idea for Careem originally came from finding a solution to that problem. As we materialized the idea, we saw an opportunity to do something meaningful not only to fix the transportation issue, but also to help people earn a living in a much better way than before. The plan to simplify and improve lives, and create an organization that inspires was born there – and it’s still the North star by which Careem navigates.

How did your prior experience with McKinsey & Company and Silicon Valley help you when setting up Careem?

Our first client was actually our ex-employer McKinsey, who was struggling with that transport problem, but we learned a lot about the billing and transport business very quickly.

I’d worked at the Silicon Valley startup Brience, and then as a summer associate at Venture Finance group, working with seed-stage companies in the software and consumer Internet industry. It seemed logical to me that there could be a way to take this manual process and simplify it via technology.

Read more: The New Decentralized Web Revolution

What are some specific changes Careem made to suit each region it operates in ?

The Greater Middle East is not one homogeneous mass, and the requirements of Dubai are very different from those in Karachi – adapting to the local needs has been one of the keys to the success of Careem.

We made mistakes early on because one doesn’t always realize all the things that can go wrong – from directions, to traffic, to the technology and lots of other little things we didn’t expect. The key is to keep building upon your launched product and iterating.

Careem co-founders from left to right: Magnus Olsson, Mudassir Sheikha and Abdulla Elyas

In helping solve the transport issues that we’ve seen across all our markets, we have diversified our vehicle types because the tech infrastructure we built can support multiple vehicle types.

When we first launched in Cairo, for example, we started with just 10 cars but scaled very soon to thousands of cars, so now we have an Estimated Time of Arrival (ETA) of three to four minutes from anywhere in Cairo. Then we introduced motorbikes which helped solve the issues of getting around in congested traffic as well as bring the cost down – a trip on a scooter is about 25-35 percent of the cost of a car trip. In major cities across Egypt and Pakistan, our bikes now account for 15-20 percent of daily trips.

Auto rickshaws are 40 percent cheaper than car trips in Pakistan, and now they are making up 10-15 percent of our daily business. Meanwhile, carpooling can bring down a trip fare by 20 to 30 percent and we are already seeing 10 percent of our trips in Amman stem from pooling.

We moved into mass transportation with the launch of buses in Cairo because 40 percent of the Egyptian population was not being served by a proper transportation service. That bus service is helping solve the congestion problem there that, according to the World Bank, currently costs the city up to $8 billion.

Despite its distinct brand image and identity, Careem was a big rival for Uber in the Middle East. What was your motivation in joining hands with Uber instead?

Joining forces with Uber helps us advance our purpose. Our combined scale and resources means we can simplify and improve the lives of more people in the region, in more ways than just mobility and help our region realize its potential, but from a place of greater strength.

The opportunity to leap-frog our region into the digital future is significant, and we are uniquely positioned to deliver on it. As a partner, Uber is aligned with our vision and they have proven their commitment to the region by being one of the first global tech companies to go deep in our markets.

Read more: Inside the Life of Pakistan’s First Female String Theorist

The deal also provided a lift-off moment for the region. It was the largest tech deal the region has ever seen and puts the region’s emerging technology ecosystem on the map of regional and foreign investors. It will radically and irreversibly enhance the support and funding opportunities for local entrepreneurs.

What advice would you offer to entrepreneurs on how to get funding from investors or how to approach financing options that suit their firm’s needs?

Based on my experience, a key piece of advice I would give any entrepreneur is to make sure you use existing resources to your maximum potential, forcing yourself to focus and prioritize to ensure that you launch quickly, learn fast and keep improving. When you eventually do go hunting for investors, make sure you go out looking for smart investors who are as interested in growing the business as you are.

Ultimately, funding is all about relationships. Start building relationships with investors even before you need funding, helping you shape the product you are building and giving investors an opportunity to see you in action.

What are some steps implemented to ensure that Careem would be ‘safe and reliable’ for its customers in Pakistan?

The safety of our customers and captains is paramount. In Pakistan, a range of background checks, in-app features and customer support help ensure that each ride is as safe as possible.

Once a captain registers on our platform, our mechanism for background checks are triggered. In-app features include a call masking option that allows customers to contact the captain without communicating their personal number. Customers also have the option to share their live-location with friends or family for their peace of mind.

During the ride, customers and captains can always get in touch with safety and security specialists in case of any incident or emergency, all the while being covered by an in-ride insurance policy for the duration of the ride.

When you co-founded Careem, did you see the company doing as well as it did? Are there still some challenges ahead for the company?

Around 90 percent of startups fail, so even though we believed in our idea there was no guarantee that it was going to be a success. The fact that we have come so far in our first seven years is fantastic, but of course, there are many challenges ahead for Careem.

Our next step is our plan to become the everyday Super App for the region, and this will enable us to simplify lives in many more ways, by offering a range of everyday services in one seamlessly-integrated and easy to use app.

اسے اردو میں پڑھیں

Authors

*

Top