Meet Careem Meet The Unicorn That's Beating Ube
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Posted On: 12/22/2017 11:32:18 PM
Meet Careem
Meet The Unicorn That's Beating Uber In The Middle East
Parmy Olson , FORBES STAFF
I cover agitators and innovators in mobile.
This story appears in the June 29, 2017 issue of Forbes. Subscribe
Magnus Olsson and Mudassir Sheikha cofounders of Careem (Siddharth Siva/Redux Pictures For Forbes)
15 Magnus Olsson and Mudassir Sheikha cofounders of Careem (Siddharth Siva/Redux Pictures For Forbes)
On St. Patrick's Day, Uber offered customers the option to summon a bagpiper for a short serenade, a marketing gimmick that followed other quirky deliveries for different occasions--pups for the Puppy Bowl on Super Bowl Sunday, Christmas trees and summertime ice cream. But as of now, sheep sacrifices are not part of Uber's repertoire. That's just one area where Careem, its top rival in the Middle East (excluding Israeli startups) and the only unicorn in the region, has one-upped Uber in the race for regional ride-hailing dominance.
In September 2016, Careem offered sheep, sacrificed according to Muslim law, to customers in Riyadh, Saudi Arabia. It was a move designed to simplify a tradition around the Eid al-Adha holiday that requires people to visit a local farm to buy a sheep or goat, get it home somehow, sacrifice it and distribute it to friends, family and the needy. "We got it, sacrificed it for you, then brought it back in boxes," says Careem cofounder Mudassir Sheikha, a 39-year-old Stanford-educated Pakistani with an engineer's obsession for optimizing everything. Careem made sure the meat was divided according to custom: a box for you, one for family and friends, and one for charity. After some customers said they wanted live sheep so their kids could play with it beforehand, Careem mobilized a fleet of pickup trucks for the job.
Careem's obsessive focus on the unique demands of the region's people, its geography and its infrastructure (or lack thereof) has helped it stay ahead of Uber in countries ranging from Morocco to Pakistan. Sheikha hopes the approach will turn Careem into "the biggest mover of humans and things in the Middle East." Moving people is a big enough opportunity: The region has a population of 700 million, with the potential, according to Sheikha, of between 150 million and 200 million trips a day.
In five years, Careem has amassed 10 million registered users in 60 cities in 11 countries, likely higher than Uber, which got into the region late. Some 250,000 contractor drivers, called captains, work for Careem, and ride numbers have been growing at a 25% monthly clip for the past two years. The privately held company is shy about discussing numbers, saying only that annual revenue is in the "hundreds of millions" of dollars and profits will come in "a year or two maximum." Careem claims to have broken even in Dubai and several cities in Saudi Arabia. Sheikha and his Swedish cofounder, Magnus Olsson, whom he met while both were working as consultants at McKinsey, share a double-digit stake in Careem, the first Middle Eastern ride-share startup to reach a $1 billion valuation. Call it a "unicamel," Sheikha quips from his headquarters in a glistening Dubai high-rise, just down the road from Uber's regional hub.
Sheikha expects ride-hailing to leapfrog traditional transport infrastructure in the Arab world, just like smartphones leapfrogged landlines in much of the developing world. Public transport in the region is woefully underdeveloped, and while some governments pour money into roads, car ownership is low: In the U.S. 80% of people own a car, compared with 40% in Saudi Arabia, 5% in Egypt and less than 2% in Pakistan. In Saudi Arabia it's worse for women, since the government refuses to issue them driver's licenses.
And while Uber is nothing if not an aggressive competitor, and one that enjoys a $3.5 billion investment from Saudi Arabia's Public Investment Fund, Careem enjoys a first-mover advantage. By the time Uber launched in Dubai, in August 2013, Careem had been in the region for a year. The $15 billion that Uber has raised in venture capital dwarfs the $425 million Careem got from state-run Saudi Telecom and Japanese e-commerce powerhouse Rakuten, but Careem is doing a better job of giving riders what they need, including having superior maps and dedicated call centers.
Uber and Careem both stand to benefit from an unexpected bonanza: Donald Trump. Because of the American president's policies--including his attempt to place restrictions on visas and travel for citizens from six Muslim-majority countries--a growing number of engineers and executives born in the region and trained in Silicon Valley are willing, even eager, to return home. In the past six months, around 15% of Careem's new engineering hires have been returnees from the Valley. They join Sheikha, who went to Stanford and spent eight years at Silicon Valley startups, and a quarter of his executives, who got their training at Valley icons like HP and Facebook. Engineers in the U.S. cite "the new government administration as a big factor in them having a chat with us," says Careem's talent-acquisition manager, Nicki Hague.
Careem app (Faisal Al Nasser/Reuters/Alamy)
Careem app (Faisal Al Nasser/Reuters/Alamy)
Of course, returning to the Middle East also means coming to terms with moral quandaries: The Saudi ban on women drivers, while distasteful to many U.S.-educated professionals, helps Careem. Close to 80% of its Saudi customers are women, and women represent 60% of its total user base. "We are their means of transport in the kingdom," Sheikha says.
Sheikha and Olsson started Careem in 2012 while they were colleagues at McKinsey, with the latter's ambitions spurred by a near-death experience. The year before, while attending a management-training seminar in Cambridge, England, Olsson, who was then just 29, suffered a brain bleed that could have killed him. After lifesaving surgery in the United States, he flew to Thailand to sit in silence with Buddhist monks and reassess his life. "I needed to build something, and it had to be big and meaningful," he says.
Olsson, who's prone to earnest monologues about letting go of fear, was educated at Sweden's prestigious Lund University and speaks Arabic. He settled in Abu Dhabi after meeting his Palestinian wife-to-be there on a work stint. He quit McKinsey while Sheikha took a leave of absence, and the two brainstormed in cafes across Dubai and Abu Dhabi. They hit on transportation as a massive regional problem that had affected them during their consulting work. While each had a personal driver in cities they visited frequently, half the time the driver wasn't available and would send a brother or cousin who often didn't know the way. "You'd haggle on price, pay in cash," Olsson says. "The experience could be completely insane."
Magnus Olsson and Mudassir Sheikha cofounders of Careem (Siddharth Siva/Redux Pictures For Forbes)Magnus Olsson and Mudassir Sheikha cofounders of Careem (Siddharth Siva/Redux Pictures For Forbes)
Magnus Olsson and Mudassir Sheikha cofounders of Careem (Siddharth Siva/Redux Pictures For Forbes)
The pair started Careem, which means "generous" in Arabic, as a car-booking service for corporate customers, working out of a 500-square-foot room in Media City, a tax-free hub for businesses in Dubai. Its users gradually started booking Careem for personal trips to the airport. Women started using it to take their kids to school, and Careem grew into a wider, consumer-facing service.
In the early days, Careem had to grapple with bad maps and confusion about addresses; residents of Dubai are more likely to give you the name of a local tower than a street, while in Pakistan home could be the "second right after the grocery store," product chief Wael Nafee says. When the Jumeirah Village Triangle, a large residential area in Dubai with hundreds of occupants, showed up as a blank space on Google Maps, Sheikha sent employees there with phones to log as many GPS locations as they could. Careem now has a dedicated team to do the same across the region as it builds its own location database. "Much as Google and Nokia's maps are great, they really suck in this part of the world," Nafee says.
Unlike Uber, Careem isn't out for global domination. Its local focus--much like other Uber clones like Didi's in China and Ola Cabs in India--combined with Silicon Valley know-how may pay off in the long term. While Uber clearly benefits from a certain coolness factor with the region's Millennials, Careem has blunted it with a savvy social-media campaign and satirical videos on YouTube (one ad plays out as a faux soap opera). "We are just building to last," Sheikha says, "and inshallah [God willing] this is going to be around for many decades and centuries to come."
Meet The Unicorn That's Beating Uber In The Middle East
Parmy Olson , FORBES STAFF
I cover agitators and innovators in mobile.
This story appears in the June 29, 2017 issue of Forbes. Subscribe
Magnus Olsson and Mudassir Sheikha cofounders of Careem (Siddharth Siva/Redux Pictures For Forbes)
15 Magnus Olsson and Mudassir Sheikha cofounders of Careem (Siddharth Siva/Redux Pictures For Forbes)
On St. Patrick's Day, Uber offered customers the option to summon a bagpiper for a short serenade, a marketing gimmick that followed other quirky deliveries for different occasions--pups for the Puppy Bowl on Super Bowl Sunday, Christmas trees and summertime ice cream. But as of now, sheep sacrifices are not part of Uber's repertoire. That's just one area where Careem, its top rival in the Middle East (excluding Israeli startups) and the only unicorn in the region, has one-upped Uber in the race for regional ride-hailing dominance.
In September 2016, Careem offered sheep, sacrificed according to Muslim law, to customers in Riyadh, Saudi Arabia. It was a move designed to simplify a tradition around the Eid al-Adha holiday that requires people to visit a local farm to buy a sheep or goat, get it home somehow, sacrifice it and distribute it to friends, family and the needy. "We got it, sacrificed it for you, then brought it back in boxes," says Careem cofounder Mudassir Sheikha, a 39-year-old Stanford-educated Pakistani with an engineer's obsession for optimizing everything. Careem made sure the meat was divided according to custom: a box for you, one for family and friends, and one for charity. After some customers said they wanted live sheep so their kids could play with it beforehand, Careem mobilized a fleet of pickup trucks for the job.
Careem's obsessive focus on the unique demands of the region's people, its geography and its infrastructure (or lack thereof) has helped it stay ahead of Uber in countries ranging from Morocco to Pakistan. Sheikha hopes the approach will turn Careem into "the biggest mover of humans and things in the Middle East." Moving people is a big enough opportunity: The region has a population of 700 million, with the potential, according to Sheikha, of between 150 million and 200 million trips a day.
In five years, Careem has amassed 10 million registered users in 60 cities in 11 countries, likely higher than Uber, which got into the region late. Some 250,000 contractor drivers, called captains, work for Careem, and ride numbers have been growing at a 25% monthly clip for the past two years. The privately held company is shy about discussing numbers, saying only that annual revenue is in the "hundreds of millions" of dollars and profits will come in "a year or two maximum." Careem claims to have broken even in Dubai and several cities in Saudi Arabia. Sheikha and his Swedish cofounder, Magnus Olsson, whom he met while both were working as consultants at McKinsey, share a double-digit stake in Careem, the first Middle Eastern ride-share startup to reach a $1 billion valuation. Call it a "unicamel," Sheikha quips from his headquarters in a glistening Dubai high-rise, just down the road from Uber's regional hub.
Sheikha expects ride-hailing to leapfrog traditional transport infrastructure in the Arab world, just like smartphones leapfrogged landlines in much of the developing world. Public transport in the region is woefully underdeveloped, and while some governments pour money into roads, car ownership is low: In the U.S. 80% of people own a car, compared with 40% in Saudi Arabia, 5% in Egypt and less than 2% in Pakistan. In Saudi Arabia it's worse for women, since the government refuses to issue them driver's licenses.
And while Uber is nothing if not an aggressive competitor, and one that enjoys a $3.5 billion investment from Saudi Arabia's Public Investment Fund, Careem enjoys a first-mover advantage. By the time Uber launched in Dubai, in August 2013, Careem had been in the region for a year. The $15 billion that Uber has raised in venture capital dwarfs the $425 million Careem got from state-run Saudi Telecom and Japanese e-commerce powerhouse Rakuten, but Careem is doing a better job of giving riders what they need, including having superior maps and dedicated call centers.
Uber and Careem both stand to benefit from an unexpected bonanza: Donald Trump. Because of the American president's policies--including his attempt to place restrictions on visas and travel for citizens from six Muslim-majority countries--a growing number of engineers and executives born in the region and trained in Silicon Valley are willing, even eager, to return home. In the past six months, around 15% of Careem's new engineering hires have been returnees from the Valley. They join Sheikha, who went to Stanford and spent eight years at Silicon Valley startups, and a quarter of his executives, who got their training at Valley icons like HP and Facebook. Engineers in the U.S. cite "the new government administration as a big factor in them having a chat with us," says Careem's talent-acquisition manager, Nicki Hague.
Careem app (Faisal Al Nasser/Reuters/Alamy)
Careem app (Faisal Al Nasser/Reuters/Alamy)
Of course, returning to the Middle East also means coming to terms with moral quandaries: The Saudi ban on women drivers, while distasteful to many U.S.-educated professionals, helps Careem. Close to 80% of its Saudi customers are women, and women represent 60% of its total user base. "We are their means of transport in the kingdom," Sheikha says.
Sheikha and Olsson started Careem in 2012 while they were colleagues at McKinsey, with the latter's ambitions spurred by a near-death experience. The year before, while attending a management-training seminar in Cambridge, England, Olsson, who was then just 29, suffered a brain bleed that could have killed him. After lifesaving surgery in the United States, he flew to Thailand to sit in silence with Buddhist monks and reassess his life. "I needed to build something, and it had to be big and meaningful," he says.
Olsson, who's prone to earnest monologues about letting go of fear, was educated at Sweden's prestigious Lund University and speaks Arabic. He settled in Abu Dhabi after meeting his Palestinian wife-to-be there on a work stint. He quit McKinsey while Sheikha took a leave of absence, and the two brainstormed in cafes across Dubai and Abu Dhabi. They hit on transportation as a massive regional problem that had affected them during their consulting work. While each had a personal driver in cities they visited frequently, half the time the driver wasn't available and would send a brother or cousin who often didn't know the way. "You'd haggle on price, pay in cash," Olsson says. "The experience could be completely insane."
Magnus Olsson and Mudassir Sheikha cofounders of Careem (Siddharth Siva/Redux Pictures For Forbes)Magnus Olsson and Mudassir Sheikha cofounders of Careem (Siddharth Siva/Redux Pictures For Forbes)
Magnus Olsson and Mudassir Sheikha cofounders of Careem (Siddharth Siva/Redux Pictures For Forbes)
The pair started Careem, which means "generous" in Arabic, as a car-booking service for corporate customers, working out of a 500-square-foot room in Media City, a tax-free hub for businesses in Dubai. Its users gradually started booking Careem for personal trips to the airport. Women started using it to take their kids to school, and Careem grew into a wider, consumer-facing service.
In the early days, Careem had to grapple with bad maps and confusion about addresses; residents of Dubai are more likely to give you the name of a local tower than a street, while in Pakistan home could be the "second right after the grocery store," product chief Wael Nafee says. When the Jumeirah Village Triangle, a large residential area in Dubai with hundreds of occupants, showed up as a blank space on Google Maps, Sheikha sent employees there with phones to log as many GPS locations as they could. Careem now has a dedicated team to do the same across the region as it builds its own location database. "Much as Google and Nokia's maps are great, they really suck in this part of the world," Nafee says.
Unlike Uber, Careem isn't out for global domination. Its local focus--much like other Uber clones like Didi's in China and Ola Cabs in India--combined with Silicon Valley know-how may pay off in the long term. While Uber clearly benefits from a certain coolness factor with the region's Millennials, Careem has blunted it with a savvy social-media campaign and satirical videos on YouTube (one ad plays out as a faux soap opera). "We are just building to last," Sheikha says, "and inshallah [God willing] this is going to be around for many decades and centuries to come."
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