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I know the Middle East very well having worked for Dubai headquartered The Entertainer (who are 50% owned by The Abraaj Group) I spent a year based at Abraaj’s London HQ in Mayfair when I founded the UK business and I travelled reguarly to Dubai and the Middle East during the two and a bit years I was with the company.
On my trips to the Middle East I realised how limited the tech startup eco system was over there in comparison to London, which actually surprised me given that the UAE is renowned for innovation and explosive business growth. There are various reasons for this but I recognised there was HUGE potential. I could see that in the coming years, Dubai and the wider Middle East was ripe for innovation and I was certain that within the next few years, hugely successful tech startups would emerge, I recall discussing this when I met with HE Sheikh Mohammed bin Maktoum Al-Maktoum (1st Secretary at UAE Embassy in London) and he agreed there was huge potential, fast forward a few years later and the eco system is thriving with a healthy startup scene and hugely successful startups are building very special businesses and Dubai is at the forefront of this.
I am so bullish about the growth potential in the region that I have made angel investments over there, including one in Guzzle the award winning app based in Dubai.
In Europe and the US, there is an obsession with the term Unicorn (A startup valued above $1Billion) I am proud to have two Unicorns on my CV JUST EAT and Gett, so I have experience of how difficult the growth and scale of a startup from nothing to such a huge valuation is. More often than not it is testament to the size of the opportunity in the space, and it also points to strong belief from investors that the team have the ability to go all the way and hit a home run in that space. In my opinion the key is actually not to obsess about valuation and instead focus on solving a problem well and building a special business, do that well and the valuation takes care of itself.
Two years ago when Rocket Internet acquired Talabat, the Kuwait HQ’d startup for $170m, It was viewed as huge for the region, I believe Mohammed Jaffar did wonders but I knew that it was only the beginning of what was to come and Unicorns in the region were inevitable. Souq.com was the first tech startup to be reported to achieve Unicorn status, however only last week I reported on Souq.com being acquired by Amazon for $650m, you can read that here so not sure what the reported valuation was based on, as the exit was substantially less, however it is worth noting that there were later offers above that amount, but Souq were already in exclusive late stage negotiations with Amazon, so I am pretty sure that had they held on longer they may well have achieved a sale closer to $1Billion or above, but none the less it was still a very impressive exit.
There is a Unicorn in the Middle East, step forward Careem who are HQ’d in Dubai, founded in 2012 and now officially the fastest growing tech startup in the Middle East, the number one ride hailing and transport app in the region and are rapidly expanding.
Careem CEO and cofounder Mudassir Sheikha is now as equally well known as the likes of Ronaldo Mouchawar (Souq.com) and Saygin Yalcin (SellAnyCar.com) and is viewed as a leader of the innovation in the region and globally. Careem are so successful that people now affectionately refer to it as Unicamel, paying homage to both to its valuation and geographic dominance.
I caught up with Mudassir Sheikha, to discuss Careem, its amazing story so far, regulation challenges, the likelihood of an IPO and more….
Thank you for taking the time from your busy schedule for this interview Mudassir
Its my pleasure Henry, happy to make time for you.
You studied at USC and Stanford, What is it about Stanford that makes it so common for their Alumni be behind many of the world’s biggest tech companies?
Stanford attracts really smart, ambition and mission-driven people who believe in the power of technology to improve people’s lives and change the world. It’s inspiring and humbling to be around them. Furthermore, there is no shortage of successful role models among the alumni that have started from nothing and built world-changing institutions.
Can you give our readers background on how you came up with the idea for Careem?
As consultants, my co-founder Magnus and I traveled a lot. We realised that there was a shortage of reliable and convenient transportation methods. We investigated the opportunity, found it to big and meaningful, and decided to jump into it with everything we had. Today, we are the region’s leading ride-hailing service with Users have the convenience of a ‘Now’ or ‘Later’ option, allowing them to book a car on demand or in advance. A range of different car options cater to the varying needs of each city in which we operate, with Economy, Max and Business car types available across all markets.
Our focus remains on understanding the needs of our customers and captains in the region. In the UAE, for example, we have Careem Kids – the dedicated Careem car that comes pre-installed with a child seat – and Ameera – Dubai’s first female chauffeur service for women. In Egypt, we integrated Water Taxis onto our platform and in Saudi Arabia we operate Careem ONE to provide for the needs of disabled people.
Which markets is Careem now active in and set to launch?
Today, Careem operates in over 50 cities in the MENATP region – the Middle East, North Africa and Turkey and Pakistan. We consider our area of focus to be east of Morocco and west of Pakistan, and we really see ourselves as a homegrown brand from the region, for the region. Our primary objective is to go deep in this footprint first before looking into other interesting adjacent markets.
What do you look for in a new market that you are considering expanding to?
Since we launched in Dubai in 2012, Careem has focused on turning the region’s most pressing challenges into opportunities, developing local innovations that simplify people’s lives. This mission lies at the core of our business and our entry into new markets is driven first-and-foremost by an imperative to broaden access to affordable, safe, reliable transportation. Careem is also a job creator with a difference, and when we look at new markets we also get excited about the opportunity to bring employment and revenue-generating opportunities to the local population. When considering a new market, we look for a relatively large urban population where transportation is needed and where the regulatory framework will allow us to operate. We work collaboratively with governments to establish our network, create job opportunities for both locals and expatriates, and meaningfully impact communities.
Careem has The Abraaj Group on board as an investor, who are one of the worlds most influential investors in growth markets, I spent a year based at their London office, so I know first hand how great they are, has Abraaj’s investment been a game changer for Careem? If so, how?
The Abraaj Group became our investors and partners in November 2015 with our Series C round of funding and we have been blessed to have them on board. Abraaj is one of the most resourceful and value-adding investors for companies in growth markets with an incredible understanding and level of expertise in these markets. At Careem, we have been fortunate to partner with a group of passionate, insightful investors that have all contributed to our rapid expansion.
You grew up in Karachi in Pakistan, how did your upbringing prepare you for the world of business and technology?
Growing up in Karachi gave me a deep understanding and appreciation of the challenges in my home region. This local insight that I and many other people at Careem share is driving one of our biggest competitive advantages. Spending time in California, especially Silicon Valley, made me a believer in the transformative power of technology to overcome these challenges and also made me yearn to build a world-class institution in our part of the world like so many entrepreneurs did it in Silicon Valley. At Careem, we are passionate about building an institution from the region, for the region – a homegrown business that will instil pride in people and be the catalyst for the region.
Pakistan is clearly still very much in your mind as Careem has operations there and you have announced a partnership with TETVA that could create 100k jobs. Do you see Pakistan becoming a hero market for Careem as the country’s economy grows?
Pakistan is a strategically important market for us. At the start of this year we doubled the number of cities where we operate from three to six, adding Peshawar, Faisalabad and Hyderabad to our services in the capital Islamabad and Pakistan’s two most populous cities – Karachi and Lahore. There is still a lot of potential for further growth in this market and we have no doubt that Pakistan will scale to become as big for us as other markets in the region, such as Saudi where we operate in 24 cities, and Egypt. And like in all other markets, we are looking forwad to creating millions of jobs in Pakistan.
Upon graduating in the middle of the dot com bubble, you spent some time in VC at GTV, how was that?
Global Technology Ventures (GTV) was an interesting experience for me and an important point of realization on my journey to becoming an entrepreneur: it gave me an insight into the mindset of investors, but ultimately made me realise that I prefer to build and operate rather than invest. It’s a personal choice, but to me building is more fun. I prefer being in the trenches.
Like many successful founders, do you see yourself going back to VC or creating your own fund in the future?
We are still in the early days of Careem’s journey to become the biggest mover of people and things in the region. Our mission is to simplify people’s lives and positively impact the lives of every single person in the region. I am completely dedicated to realizing this mission and have not had that time to think of what comes after it.
You spent some time as a Partner at Mckinsey & Company, Do you feel that those from a management consultant background make better founders?
I believe that management consultancy teaches the core principles of problem solving like no other profession. If that can be combined with operational expertise and excellence, then this creates a very powerful combination for entrepreneurs. That said, founders can come from many different backgrounds, and in this region in particular we have seen a great number of entrepreneurs build great businesses from the widest variety of origins. There is no single formula for starting a company except willingness to take risk, not giving up, and being quick in problem-solving.
Careem is now featured in Google Maps, do you think that you will scale that partnership as you expand?
Our ongoing collaboration with Google has been vital to our business and this integrated feature – enabling users to searching for directions on Google Maps to tap on a ride-hailing icon that reveals the closest Careem cars – is the latest step in our valuable partnership. We also work with Google for navigation in our cars and use Google as a platform to create awareness of our services.
Uber have announced they are shuttering their Danish operations, have Careem faced similar regulatory challenges?
Careem is a firm believer in the importance of regulation for the provision of reliable and safe transportation. We work closely with governments and local authorities to comply with regulations, and often our collaborative efforts have led to the creation of new regulatory frameworks. Our strong relationships with regulatory authorities, driven by our community-first approach, are one of the key reasons why we are well-established as the region’s leading ride hailing app.
Careem has made it clear that it’s intention is to IPO, is that the finish line for you or purely a fundraising event to continue global expansion and domination.
In a region that has limited public transport infrastructure, Careem is still very early in realising the potential of its always-on mobility platform. We are blessed to have investors that have put faith in us and invested north of $400m in Careem to-date. At this point, we are sufficiently funded to execute our business plan. IPO is always an option for fast-growing businesses like Careem and we will explore it at the right time.
Mudassir thanks again for taking the time and I wish you and Careeem every success in the future.
Thank you Henry.
With the likes of Emirates and Etihad etc flying direct to many locations across the Middle East, it is now a very common destination for people from Europe to travel to both for business and for holidays, there is also a huge ex pat population across the region.
So if you are planning to travel to the Middle East or are relocating, Careem is the go to app you need for ground transportation needs, so make sure you download the app, for Android here and IOS here
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