Fueling Up: Careem's Entrepreneurial Journey Is Back On, Says Co-Founder And CEO Mudassir Sheikha "I truly feel that we have a once-in-a-lifetime chance to use this opportunity, use the starting point we now have at Careem, to leave the region with a Google or Amazon type of institution that's going to outlast us, and many people after us."
By Aby Sam Thomas Edited by Aby Sam Thomas
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"I truly feel that we have a once-in-a-lifetime chance to use this opportunity, use the starting point we now have at Careem, to leave the region with a Google or Amazon type of institution that's going to outlast us, and many people after us." As Careem co-founder and CEO Mudassir Sheikha said this line to me, it was impossible to miss the sheer delight radiating from the face of the man who, while already being able to lay claim to one of the MENA region's greatest entrepreneurial triumphs, was now setting out to lead his company on its next phase of growth.
My conversation with Sheikha happened in April, a few weeks after his enterprise had announced a US$400 million investment from fellow UAE-based tech and investment conglomerate, e&. After Careem's ride-hailing business was bought out by San Francisco-based Uber for US$3.1 billion in 2019, the backing it has now received from e& for its Super App has been described by Sheikha as a "restart" of the company's entrepreneurial journey. (For those who may not remember, it originally kicked off in 2012.)
And while one might have expected Sheikha to be particularly jubilant about the funds that Careem now has at its disposal, I felt that he was -more than anything else- especially exhilarated about being able to lean into his entrepreneurial builder persona again, driving the creation of what he hopes will be "the preeminent technology platform of our region."
I got to see this firsthand when, toward the end of our conversation, Sheikha started to show me the One-Click Checkout offering that Careem's payments arm had, at the time, just debuted on online retailer 6thStreet.com. In that moment, his eyes were sparkling, his grins stretched from ear to ear, and his enthusiasm was truly palpable. "I'm excited about this," he says, as he tells me of all the benefits that this new product will bring to consumers in the region- but he might as well have been talking about the future of Careem.
Indeed, the new investment from e& will lead to Careem operating as two organizational units- the first will be its ride-hailing business, Careem Rides, which will continue to be wholly owned by Uber, and the second will be Careem Technologies, which will operate the Super App as well as other verticals and enablers. The latter will be owned jointly by e&, Uber, the three co-founders of Careem (Sheikha, Magnus Olsson, and Abdullah Elyas), as well as colleagues in the business.
Related: UAE-Based e& Invests US$400 Million To Acquire A Majority Stake In UAE-Born Careem's Super App Business
Source: Careem
Under this new structure, Careem's ride-hailing business essentially becomes a tenant on its Super App, and when asked about the reasons behind this demarcation of the enterprise, Sheikha pointed out that not only was it required from a legal standpoint, it also aided the company's growth ambitions for the future. "The ride-hailing business, as you know, is profitable," Sheikha explains. "It doesn't require investment to scale, and it is Uber's core business. But where the money and partnership was required was in scaling the Super App, which is why the investment was raised. It [the division of the businesses] is also more aligned with our new partner's strategic objective to build a Super App, rather than build a specific vertical in the Super App. It thus turned out to be the right answer for all the parties involved, and for the capital that was required to grow the Super App part of the business."
The Careem Super App came into being in Dubai in June 2020, and while it has undergone a number of iterations since, Sheikha describes it today as being "a one-stop-shop for all your daily needs," where one can arrange everything from dry-cleaning for your clothes, to ordering your weekly groceries. "This is the place that you can get all of the things that you need to live your daily life done," Sheikha says. "The reason why this one-stop-shop is valuable to customers is because you have the convenience of everything on a single app- you now don't need to have multiple apps, multiple logins, multiple addresses, or multiple payment methods. Now, you could argue that some people already have these things configured with other apps, but that's for existing use cases- we are going through a digital revolution where more and more things are getting digitized, and there are so many apps that you don't have today that you will have in the future. But if you just have a Super App, then you can save yourself the inconvenience of having to download 20 more apps to use the 20 more services that will become available over the next couple of years. That's the convenience value proposition of having a one-stop-shop."
The Careem Super App's second value proposition, Sheikha continues, lies in the economic advantage it presents to both the consumer and the operator. From the latter's viewpoint, for instance, the Super App just makes for a more efficient platform- one needs to acquire the customer only once on it, and then, one is able to monetize them over multiple services provided on it. In fact, Sheikha reveals that customers that use more than one service on the Super App are 1.5x more likely to stay on the platform -and transact 3x more- than customers that only use one service. In addition, there's so much potential for the kind (and number) of services that can actually be provided on the Super App- this would also explain why Careem is already dubbing itself to be "the everything app" for the region.
Now, it can be argued that customers wouldn't really care about the efficiency that Careem sees as a result of its Super App- but Sheikha points out that it will start to matter when they see value being passed back to them as a result of it. Users of the Careem Super App get to see this by becoming members of its subscription and loyalty program, Careem Plus, which, at a cost of AED19 per month, allows them to gain savings of up to AED200 in the same period. It's a good deal, all right- and the Careem Plus user base, which has grown by nearly 4x since January 2022, would agree. Of course, a big part of the Super App's success lies in both the quantity and quality of services it is able to provide on its platform, and while Careem may be able to provide a few of them, Sheikha is clear that his company won't be able to cater to all of them.
"One of the challenges of becoming a Super App can be addressed in this question from a consumer standpoint: 'How can you assure me that you're the best in each of the things that are on your Super App?'" he explains. "And frankly, the answer is, you cannot. You are going to be good in some things that are or close to your core competencies, but everything else, you will struggle in… We come from a logistics (and a little bit of payments) background, having built a ride-hailing service across the region. Those are the core competencies of Careem, and there are also things close to them in which we believe that we've the ability to become the best-in-class in those services, because they're closer to what we've done for a living. Everything else is something that we believe others can do better than us, or will be able to do better than us over the mid to long-term. So, the idea we're going with is that let's partner with the best-in-class players for those other categories, and bring them on the Super App, so that customers still get the convenience and the value proposition to use things in a single place, and we also address one of the biggest challenges of being a Super App."
CEO Mudassir Sheikha at a Careem town hall. Source: Careem
It's with this mindset that the Dubai version of the Careem Super App, besides hosting the services provided by Careem itself (think ride-hailing, bills payment, or its new DineOut feature), also hosts offerings "powered" by other players with the local startup ecosystem- for instance, laundry is taken care of by Washmen, and an assortment of home services are covered by Justlife. Careem is on the lookout for more such external tenants to be added to its Super App, and that, according to Sheikha, will be something that plays out well for the MENAP region's entrepreneurial players.
"If you look at the cost of developing such services today, it is quite prohibitive," Sheikha explains. "You have to do a lot of work to just build these services, and then, you have to spend a lot of effort to expand these services across the region, and, further, market these services. This is all very, very expensive. In a world where money was flowing cheaply, or the purchasing powers are quite high (which they are in some parts of the world), this is doable- you can build pure-play things for everything… But when the access to capital is a bit limited (which it is at the moment), and when you have markets like Egypt and Pakistan, where the purchasing powers are not necessarily very high, you have to build things more efficiently, and the Super App really becomes an enabler to get to the market the services that people need, because the price point of launching on the Careem platform is way lower than what it is to build a pure-play thing from the ground up."
Add to all of that the fact that Careem operates across 14 countries in the MENAP region, which means that a tenant on the Super App in, say, Dubai, will not only have the chance to offer its services in, say, Cairo, but it would also be able to make use of the underlying infrastructure to ease its expansion into such new markets. Meanwhile, looking at it from the viewpoint of the customers across the region, they now get access to a myriad of services that they didn't have before, and that, according to Sheikha, feeds into Careem's mission to simplify people's lives with its various offerings.
Now, all of this should be an exciting proposition for those of you building businesses in the region's entrepreneurial ecosystem, and, well, for his part, Sheikha's eyes light up as he speaks of the impact the Careem Super App could potentially have on all of your dreams and ambitions. "From an ecosystem standpoint, the Super App and its growth should be an inflection point," he says. "That's what we are hoping to achieve over the next couple of years to bring the region together, to make it a lot cheaper to build these services, and to digitize and leapfrog more and more things in this region."
Of course, it's still early days for the Careem Super App, and while the larger goal would be to have it function much like Apple's App Store or Google's Play Store whereby prospective tenants would need to apply and then be approved to be a part of the platform, Sheikha admits that he and his team are still at work to figure out how they can ensure the right quality of experience for its many customers.
Plus, Sheikha adds, the Super App is something that needs to be built on a city-by-city basis. "There can be no such thing as a Super App for the region," Sheikha declares. "In fact, there can be no such thing as even a Super App for a country. For instance, in the UAE, we are currently a Super App in Dubai, but we are not a Super App in Abu Dhabi… The Super App is really a city-by-city game, and now that that we've seen the validation of the Super App in Dubai, we've made a list of the next five cities we want to enter. As you'd expect, the next five cities are in the UAE, Saudi Arabia, Jordan, and some of our other key markets… We are going to do this city by city, and we'll make sure that the right services get launched that makes sense for each of them." And this is where e&'s entry into Careem's stable starts to make a lot of sense. For one, Sheikha points out that there's a lot of alignment between the visions of Careem Technologies and e&, which, by the way, is currently in the transforming itself from being known primarily as a telco to becoming a cutting-edge "techco."
Related: The Ride Continues: How Careem's Culture Fueled The "Careem Cartel"
Mudassir Sheikha, Co-founder and CEO, Careem. Source: Careem
There's also a geographical overlap between the two entities- Sheikha highlights the fact that the countries in which e& has a commanding presence today -i.e. the UAE, Saudi Arabia, Egypt, and Pakistan- happen to be Careem's key markets as well. "In these markets, e& has got both a large consumer base and a large business customer base, and, for us, it is an incredible opportunity to start up-selling and cross-selling more services to these customers," Sheikha notes. "We actually believe that the investment that has been made is a fraction of the value this partnership will unlock through the realization of synergies with that large customer base that e& has."
But as Careem sets out on this new journey with e& behind it, what's setting it up for success for the road ahead is the experience it has had over the past four years with its earlier backer: Uber. "In the region, we don't know how to build and run a global technology platform, because we've never done it," Sheikha notes. "But being a part of Uber gave us a pretty unique vantage point on how to do it successfully. There are a couple of very important lessons that we learned from Uber... For instance, one of the things we've seen Uber do is that they solve problems through technology and product, way more than they do operationally. This is one big realization and learning that we've had from Uber, which is that if you want to scale globally, scale in a large manner, then a lot more has to be technology-driven. A second thing that we've learned from Uber is that you have to find the right balance between growth and profitability. You cannot have this or that- you have to find the right balance. Another thing that I've personally learned from Uber CEO Dara Khosrowshahi is on how to really empower your leaders- for instance, in my case, [following Careem's acquisition by Uber], I could have felt like an employee of Uber, but I didn't. I still felt like a founder of Careem, and that was, in a large part, due to Dara's leadership, frankly speaking."
While such insights and experiences are certain to aid Sheikha's leadership of Careem into its future, it's interesting to note that he -and, by extension, his enterprise- continue to be governed by a well-thought-out set of principles that has been a part of their journey since the very beginning. I got to see this for myself when, at one point during our conversation, Sheikha started to recite what is now called Careem's Values, without at all hesitating or needing any kind of reference to boost his memory of them, which is currently in its fourth version since it came into being. "There's owners not employees, which is value number one," he lists. "Then there is to the moon and beyond, i.e. super ambitious, value number two. Third is every experience matters, which is customer centricity. The fourth is committed to developing each other, which is our responsibility from a development standpoint. The fifth is that we need to be responsible for our communities. Now, all of these five things were there in some shape or form from version one- of course, they've evolved, and they've been reinforced here and there, but they were there since version one. The last value that we now have though is new, which we added for our tenth anniversary- and that is to build a lasting institution."
That last point may have been formally added to Careem's Values only recently, but it's something that has been a part of Careem's DNA from the start, with Sheikha and his fellow co-founders known to have always reiterated that their purpose is to build an awesome organization that inspires. But while its acquisition by Uber may have cast some doubts about the continued validity of that mission, Careem's ambitions with the Super App now have recharged that original drive and dedication with which the company was conceptualized in the first place.
"Our culture is going to become a lot more entrepreneurial [again], and that is what is needed to build the preeminent technology platform of the region," Sheikha says. "We are a company that's going to simplify the lives of the 500 million people that live in the region over the next decade, and that is going to become, inshallah, one of the largest companies in the region, and not just one of the largest digital platforms in the region. It's going to require a lot of hard work, a lot of sacrifice, and a lot of entrepreneurial energy to make this thing happen- and that's what we are getting unlocked through this process."
It's with this spirited attitude that Sheikha is charting the course for his enterprise's future, and when I asked him if the road ahead fills him with trepidation or hope, the entrepreneur points toward the chance he sees -with Careem- to improve the lives of people, at scale, in a single lifetime. "That's what keeps me going, frankly," he says. "Is it easy to build and keep going at this stage in the journey? It's not, but who said it was going to be easy? To build something amazing requires multiple decades of devotion and commitment. And with the kind of opportunity that we have ahead of us, from our purpose, from an impact standpoint, I'm personally quite excited and pumped. I can definitely use a small break, of course, it can be exhausting after a while- but then again, I would not do anything else but what I'm doing at the moment."
