Magnus Olsson is the co-founder and Managing director at Careem. At TechCrunch, Olsson advised on how to scale startups in the MENa region. We sat down with Olsson and talked about his experience with starting up Careem, and the future plans the company has.
Do startups have it easier nowadays?
“I think so yes. When we started Careem 6 years ago, there was no interest in the MENA region. First, there is a lot of incubators and accelerators in the region today in places like Dubai and Lebanon. Second, governments have woken up to tech and supporting entrepreneurship through funding, setting up incubators and accelerators, and even changing regulations. Third, when it comes to funding, there were very few local VCs that existed. And of all international VCs there were very few who had an appetite to invest in the region. Even open investors did not have an allocation to invest in the Middle East. So funding was a lot trickier 6 years ago”. Olsson also adds, “The overall attitude and matter of entrepreneurship among people were low so it was hard to attract talent. The smart kids would say that they would join big companies instead of working hard to start their own”.
What are the challenges that are facing Careem as a business that aims to grow in the MENA region?
“When we first started, the mission of Careem was to inspire others to initiate startups and invest in the region. And when we talk about our region this mean that it is from Morocco to Pakistan, which is the great Middle East; it is 7 million people, 10% of the world population, average age is 25, people are young and willing to change, open to change, smartphone penetration is 50%, people are connected, so this is the best scenario.
But the challenging version of the region is that it is not a religion, it is a bunch of countries. If you want to grow and scale you have to set up country by country because of the local context.
For example if you need to set up in Saudi and Bahrain and Egypt it takes a lot of patience and time and money to just get the basics of it. The greatest challenge lies in the region not being a region that’s why we look at our business as city by city. We are present in 120 cities today, we operate differently in different countries such as Beirut and Dubai and Khartoum.
The second thing that has been challenging for us recently is creating a culture or an organization, at this scale, that that can be present in so many places. For a young company that has been around for 6 years, we are a complex organization because we are present in so many places. We have 3500 people in other cities, how do you get all the people on a conference call?! This is just a basic example.
Furthermore, we are not a traditional transportation company. We don’t own cars, we don’t have offices; but at the company we think about applying different regulations in different countries. We got a license to operate and Saudi and Jordan and recently in Egypt; so on the journey to getting there, there have been several discussions with the governments on what should be the regulations that pass. Now at this point in time we are fully licensed and regulated. Recently we launched in Oman after agreeing with the government on how Careem operates in Oman where we are actually partnering with a local taxi companies.”
How is Careem getting collaborating with Saudi woman?
We are super excited to work with Saudi women. We work with woman in several markets such as Pakistan Egypt in the UAE, we had that from almost day one. The biggest news is the shift that happened in Saudi Arabia. In fact half an hour after the decree was announced, we launched a campaign saying ‘Ahlan wasahlan’ to encourage Saudi women. In fact, we have a good number of women captains in Saudi which is amazing!” exclaims Olsson.
“If we can support and empower Saudi women, who can actually drive with us and make their own income and support themselves, we can contribute to the economic fabric of society.”
What are the future plans for cream in the region?
“Our mission is to simplify the lives of people and build an awesome organization that inspires. In reality, we don’t really care about transportation; we started with that which was a great start that simplified the lives of people and offered them job opportunities.
But the next big topic in people’s lives is food. Earlier in the year we made a small acquisition of a company so that we start learning a bit about food delivery space and we have launched our services on food delivery in a few selected cities.
And on transportation level, we are more excited to make our services available to more people in the region and expand our operations to new cities by having lower price point rates. We’ve done smaller cars and different transportation vehicles, but the next thing for us is it to try to work with buses, not in a traditional way, but by creating a digital experience for the bus. Recently we announced the acquisition of a company named Commut which is a digital platform that allows users to share bus rides.”
“We are also excited to see how we can help the region with payments because it is a new challenge. In the MENA region there still a majority of cash payments. And because we have so many daily transactions between both, our customers and captains, we are trying to see if we can do something that could make the operation easier.”
Speaking about the geographic expansion of Careem, he said, “We are present in almost every country but we are not present in every city yet. In Pakistan, we just launched in our 12th city where there are 250 million people; so there are a lot more people left to reach.
We have also launched in multiple cities in Saudi Arabia, Egypt, UAE, and Jordan recently. If we want to simplify the lives of people we have to be present in every city”.