Muneeb Mayyr is the Founder & CEO of Bykea, a motorbike ridesharing, logistics and payments service fairly popular in Karachi and few other cities of Pakistan. Muneeb’s profile reflects colors of hustle, diversity and risk. From investment banking to the restaurant business, large-scale e-commerce to startups, Muneeb has taken on many ventures, Bykea being the most recent one. Bykea announced a $5.7 million Series A funding in May and I was interested to chat with Muneeb. He turned out to be accessible, candid and insightful. I had a list of questions prepared but ended up not using those. Muneeb, surprisingly, had a good idea of what I wanted to talk about and what was supposed to be a half an hour phone call ended up being an hour long. We talked about his journey at Bykea, state of ride-hailing in Pakistan and his vision for Bykea. I hope you like reading the transcript of our discussion below.
TJ: Tell us about your childhood, where did you grow up and what kind of a kid were you?
Muneeb: I grew up in Rawalpindi and I’d say I am a proud “Pindi boy”. Our house was near Murree Road and we got to witness many political rallies, to the extent sometimes that the tear gas shells would end up landing in our house. My schooling was based in Islamabad but I was always close to the hustle and bustle of Pindi. My parents always gave me the freedom to explore the twin cities and since I was allowed to use the public transport to go anywhere I wanted, therefore I ended up exploring most of Pindi and Islamabad at a young age of 14 or 15 on public transport.
TJ: What led to your involvement in SNL Financial in Pakistan?
Muneeb: I went to college in the US, then joined Bears Sterns in investment banking and hence have worked in New York City for a couple of years. Later, I joined SNL Financial-a company that sold data to banks and were outsourcing work to India at that time. After a year of my joining, I convinced them to shift some work to Pakistan as well and ended up moving back to Islamabad from the US to start SNL’s Pakistan operations 2004. Most people don’t know that SNL (now called S&P Global) continues to be the second largest IT exporter in Pakistan after NetSol and had nearly 700 people when I left. Now its 1400 people I think with a 24×7 BPO and Software Development. I ran the operations for 7 years and left soon after SNL got acquired by New Mountain Capital, a private equity firm.
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TJ: How did you get involved with Rocket Internet?
Muneeb: Post SNL, my colleague Mannan and I made an eBay like platform for Pakistan. In order to raise funds, we reached out to Rocket Internet. They already had plans to enter Pakistan’s e-commerce market so I decided to join as a Co-Founder in this endeavor. As a result, I moved to Karachi and started Daraz.pk. Spent four years there and was fortunate to have access to capital and formula to make Daraz.pk a success.
TJ: Why did you leave Daraz?
Muneeb: Pakistan is 200+ million people but not all of them were going to buy a new cell phone, which was Daraz’s primary offering. I wanted to build a tech platform that addressed a larger Urdu speaking demographic and to me, transportation and logistics around motorbikes seemed like a larger addressable market to build a platform around.
TJ: How did you come up with the idea of Bykea?
Muneeb: Seeing the success of Ride-hailing services, I started looking around for motorbike-based models globally and Go-Jek from Indonesia caught my attention. Indonesia is very similar to Pakistan in terms of a huge motorbike population and smartphone penetration. There are nearly 17 million motorbikes in Pakistan and are considered the primary asset of our middle class, I wanted to help leverage smartphones and motorbikes into income generating assets for this significant population.
TJ: Is Bykea really a taxi business?
Muneeb: It’s a platform that runs on the rails of a motorbike network and the idea was to utilize bikes for taxi and delivery services because I had learned from my days at Daraz that payments and delivery is still a problem that needs to be solved. Initially, we were repeatedly told that our delivery business would work but not many believed that the motorbike ride-sharing model would be so successful, so we proved many wrong. Demand for motorbike ridesharing exceeded supply at onset and we realized very soon that in the ride-hailing industry, supply is harder to build than demand.
TJ: Tell us about the founding team and what was your first year at Bykea like?
Muneeb: We were four people in the founding team – Mannan with his software development background oversaw information technology, I assumed business operations and marketing, Ishaq, an actuary led analytics and finance and Rafiq led supply and logistics having led a leading courier company in the country. The first year we saw hockey stick growth but in the second year, we ran out of capital and just about at that time the major ride-hailing companies operating in Pakistan saw our success in the bike category and entered with a storm, trying to kill the competition with lower prices and higher subsidies. We were very lucky to hold the fort in the second year against the most well-funded startups and convinced investors that there was something very special we had built which prevented these giants from taking away the market share, ultimately leading to the Series A.
TJ: Which city is your major user base?
Muneeb: The majority of our business is in Karachi and Rawalpindi followed by Lahore where we need to spend more time to crack that market. In general, Rawalpindi and Islamabad area stronghold for Careem, Lahore for Uber and Karachi which is Pakistan’s biggest city is our stronghold. With 20 million people and 3 million motorbikes, Karachi is not a small market by any means and was our prime focus from the start.
TJ: How is the bike sharing business different from the car-sharing business?
Muneeb: Car sharing businesses are very expensive to operate; you are not only paying the driver’s labor cost but also have to factor in the asset cost of the car and in comparison, a motorbike’s asset cost is very low. You will see that due to the recent acquisition of a ride-hailing company, fare prices would go up for customers to reach profitability because they are currently kept low to penetrate new markets like Pakistan. In a country like ours, the real opportunity lies in motorbikes where fares can be kept low while still churning out profits.
TJ: You have recently raised a Series A funding round. What are your plans with the funding?
Muneeb: We see bike ride-sharing as a local play and not an international play so the main challenge in our market is true localization. Of the 220 million people here, less than 20 million can search or type in English on a smartphone. In the longer run, our product which is catalogue based while being completely in Urdu and doesn’t make a user type to search anything, have a better chance of addressing the breadth of Pakistan’s population. Snapp, an Iranian ride-hailing company, does more rides in Iran alone than Careem does in the entire Middle East because keyboard literacy is very high in Iran and everyone can type and search in their own language.
In-city logistics is another segment where we are strong and will soon expand into B2B services. We might also add other vehicles like a microvan or pickup truck to it later.
Also, in a country where no more than 5% of the population (at a unique level) is banked, payments and logistics go hand in hand and this is the reason why we are one of the largest cash-on-delivery logistics players in Pakistan. We feel there is tremendous opportunity to convert cash to digital – at first and last mile level for consumers and businesses. Rest assured, we will make a big play in this space very soon.
TJ: Which startups you think have truly reached the Pakistani population?
Muneeb: Easypaisa money transfer at a retail shop, not the app, has done a great job in reaching the lower middle class in Pakistan and their valuation speaks for itself.
TJ: Can you share some numbers from Bykea?
Muneeb: About 2 million people have installed our customer app and half a million motorbike owners have installed the driver partner app in this two-sided marketplace of ours. We have 15,000 odd active driver partners at any given time, and for context, they are more than the total fleet of all Pakistani courier companies combined. Our driver partner show ever is not active all day though and tend to juggle their full-time jobs with part-time earnings on Bykea. When we closed our funding, we were at around a million bookings per month with a focus almost entirely on within a city, not city to city logistics.
TJ: You are competing in the last mile logistics space. Don’t you think it is already getting crowded with the likes of TCS and Cheetay?
Munneb: We are in completely different industries. TCS is in the city to city document and parcel delivery business primarily, while within city P2P logistics is a part of what we do today. We have not entered B2B logistics yet but plan to this Fall. However, TCS did have an on-demand service called Hazir which had the turnaround time of 2 hours compared to our 15 min on-demand service. Cheetay, on the other hand, is primarily in the food lead generation business with a minor play in logistics, catering mostly to an affluent upper middle-class market. We, on the other hand, are focused on small shops or businesses and Facebook sellers sending parcels on the logistics side. The cash on delivery space, could in principal get crowded but our on-demand cash to digital payment transfer business has no competition and we feel we can totally own this green field that has a very large addressable market. When we launch our B2B logistics technology with payments integration, customers will know that there is nothing quite like it in Pakistan or for that matter in the region and we are confident we will solve an existing problem to compliment the market, not necessarily poach market share from other logistics providers.
TJ: Why do most of Pakistani tech founders come from investment banking backgrounds?
Muneeb: I don’t think this is a Pakistani phenomenon, bankers are often founder in many emerging economies. Pakistan’s software development talent has mostly focused on services export and not on building products, so there has been little innovation around products built for Pakistan. Software engineers are not product people per se and working in services bribes them into staying execution people. Secondly, ridesharing and e-commerce is very operation focused and not necessarily evolutionary technology. People coming from investment banking and management consulting are often good at working hard and positioning the right story, later executing and backing it up with a strong understanding of numbers. They are similar to many of the investors and thus this particular demographic has an easier rapport with them. I myself, don’t have the product development skills and that is an area I spend most of my time learning.
TJ: Daraz was a very aggressive company in terms of targets, do you have same culture in Bykea?
Muneeb: We are aggressive and realistic while being a 100% number focused company, we may not share metrics widely but certainly with teams and individuals while making them accountable for their performance.
TJ: What do you think about Airlift? Is there a big potential for them?
Muneeb: Airlift is pretty cool, their model is similar to Svwl from Egypt and Shuttl from India and they target long hauls (20KM+). However, they do not solve the first and last mile so they become a very good complement to our service as we solve the challenge for them. For example, in Rawalpindi, people use the Metro bus service that solves for the long haul of 20 km extensively but Bykea is actively used to and from the Metro station. So, we are complementary to shuttle models.
With that, we concluded our conversation and I felt impressed by the clarity and vision in Muneeb’s thoughts. Interviewing founders is always a great learning experience and this indeed was an amazing one.
