Hi, everyone. We're sort of getting the hang of this now, and it's sort of sad that it's already Friday because this is like, I don't know, it's presumptuous for me to say, but I've been starting to enjoy these 3:00 sort of gatherings. We're soon getting the technique ready here for a Friday afternoon here in Stockholm. Welcome, everyone, and a particular welcome to Dany and Mostafa, who are our speakers today. Dany runs the best investment company in the Middle East, BECO, who we have invested together with for several years and in several deals. Mostafa Kandil is the founder of Swvl, which we own together with Dany. I think Dany, you invested before us and then helped us invest. We're super grateful for that because Swvl is one of our rising stars.
Come a couple of years, we think Swvl will give Blabla and Voi a run for the money because it's going to be big. We'll run this in the usual sort of fashion. Dany will introduce to the region Mostafa will continue with Swvl specifically. Over to you, Dany.
Thank you, Per and Björn. Thank you, everyone, for being here. Just give you some context about us as a firm, and then what I'll do is I'll fly through some slides that hopefully give you a deeper insight into what's happening in our region. Vis-à-vis obviously, the venture ecosystem, take you on a trip down memory lane, and then, obviously, I think we'll do a lot more in-depth discussion for you to gain more color in the Q&A. At BECO, we're a two GP firm. We manage about $200 million AUM. We're an early-stage investor, so our ideal entry point is just before the A. We have a concentrated strategy where we basically concentrate and back and go heavy behind the breakouts, like Swvl. You'll hear more about that in a moment.
We have quite a diverse team, I think the reason that I put this up here is two reasons. Number one, we are unusual in the way we're structured, I'll tell you why that is, particularly in this part of the world. We have two people here in the firm, that's 20% of the headcount, that do nothing but fundraising. Not just fundraising for us, we only raise once every three years. It's fundraising for the portfolio, for people like Mostafa, who want to concentrate on running the business, need to do the growth rounds, which in our region are a challenge, we'll talk to you about why.
One other thing I wanted to just highlight here, we're also doubling down on this in the firm, is that we are adding people in data to basically be able to go granular early on everything from cohort analysis to unit economics to growth economics, and really understanding product market fit as quickly and as early as we possibly can. To maintain discipline when we go hard behind the breakouts like Swvl. As a fund, we hold ourselves to very high standards, we've performed better than the equivalent vintage in the U.S. top quartile VC in both our funds, and Careem has returned the entire fund and some. Here's where it gets interesting. We've been doing this is the 10th year we would have been doing this.
We started from very small, humble beginnings, two, three people in an office trying to figure out what to do and when this ecosystem would mature. It's maturing beautifully, and we're going to talk about how that is. One of the things we did very early on was spend time outside of our markets in the globe, in the world, both courting Per and Björn so that we get to know them, they trust us, they like us. We know what they want, so we can show them stuff so that they can invest alongside us. I'm glad to say that we've done this with VNV several times now.
Again, a lot of these names that you see up on the screen here are some of the best investors in the world, have invested in our region pretty much for the first time and pretty much for the first time in our portfolio. That is just us spending time out in the Bay Area, building relationships and understanding what people want and showing them what amazing founders we have, like Mostafa and others. Just to show you the real opportunity here, to give you a bit of data. Now, I've shown you the outliers. We know that the most amount of money, dollars going to venture per capita is in the U.S., and that's at about $330, and Israel is off the charts.
If you actually take Silicon Valley on its own and strip out Silicon Valley from the U.S., it's probably equal to what's going on in Israel. It's about $850 per capita. We're at three bucks in the region. That's not a good thing, but it's a very good thing because that's the opportunity, right? There's so many amazing founders like Mostafa doing some incredible things and tackling really large markets that could potentially result in very large outcomes, and they really just need the money. Just a quick skew here. This is MENA, and MENA is the GCC, Egypt, and the Levant. It's about 180 - 200 million people. If you take the UAE and Saudi, which are small markets, but a lot of activities going on there, they're probably closer to about SEK 10 per capita, but still vastly underfunded.
Just to take you on a trip down memory lane, I've been in this ecosystem since 2000. I was a co-founder of the region's largest job site called Bayt.com back in 2000. My gray hairs are there for a good reason. In that decade, 2000 - 2010, a total of $50 million was invested in the technology ecosystem. If you look at the Israeli ecosystem or any other ecosystem, it's in the tens of billions, if not more. Really nothing happened, and we still had a few successes, and these are some of them. What's happening now is a lot more money is going into the ecosystem. I think while the pandemic is a tragic event globally, it has actually brought us many silver linings, and I'm sure you're going to hear about those from Mostafa.
Most of the companies that we have invested in have seen the same V-shaped recovery, or they have been on the upward of the K, and they have been far more efficient than we ever thought they would be, thanks in large part to what happened within the pandemic. We had very few companies, four from 2010 - 2005, that were above the EGP 100 million mark, we have now got 20 and counting, and the count is rising very fast. In terms of the regional ecosystem, there is us right in the middle. We are sort of just before Series A, a bellwether around Series A. There is a lot of activity now going on in the region with earlier-stage investors, seed and pre-seed, and Series A funds, particularly in Saudi. The government is pumping a lot of money into the region, into Saudi particularly.
What we are struggling with in the region, which is why we've configured ourselves to have two people in fundraising for a number of years now, is this valley of death, which is the larger Bs and Cs. That is why we spend so much time, hopefully building trust and strong relationships with our friends at VNV Global so that we can show them exciting opportunities and they can invest alongside us and capitalize on that opportunity. The way we look at the region is really threefold. It's sort of a three-pronged investment thesis, it's high level, we can go deep in the Q&A if you like. Basically, the GCC is like the world's best-kept secret. The GCC, for those that don't know, it is Saudi, Bahrain, Kuwait, UAE, Qatar. It's those Gulf countries.
While they are probably 80 million in population, or maybe even less, they have some of the highest ARPUs, both across enterprise and across consumer, and very, very low CAC, which is a really profitable relationship. You have Egypt, and Mostafa is the best ambassador for what can be done in Egypt. You have Egypt with a very large 100 million people. About 40-some million have access to high-speed internet connection and bandwidth on their phones. What's cool about Egypt is it is so difficult in Egypt, with all due respect, to build a fast-paced business. You have lots of headwinds. It is bureaucracy, infrastructure, hard and soft, it's quite sometimes broken, and lots of headwinds.
If you can build something massive like Mostafa has at Swvl in Egypt, our thesis is you can take that, and it's such a big market, if you can build to scale in a market like Egypt, you can build that anywhere, and particularly in emerging markets. The problems that we face in emerging markets, particularly when Mostafa is catering to broken infrastructure, and I'm talking about public transport, there's no other mode of modality of transport apart from mass transit. Mostafa is helping move people around and taking them to their offices and back, that that transports to Middle East and Africa, Southeast Asia, Latin America, and so on and so forth. I'll tell you why Southeast Asia and Latin America, with Mostafa specifically, is an important comparison point. Finally, the UAE is a nice place to be. It's very safe.
It's very secure. It's got high-quality infrastructure, healthcare. We've seen how amazing they've been with the pandemic. Nice beaches, nice sun, you can tell from my suntan, tax-free for the most part, highly connected as in connectivity with airlines, not just bandwidth connectivity, which means you can hop on a plane at any time from Abu Dhabi or Dubai get to anywhere in the world service the greater area, really build a global business out of Dubai. It's easy, Mostafa will talk to that, I'm sure. If he doesn't, I'll ask him to. He will talk to how relocating his C-suite and senior leadership team to Dubai has enabled them to hire global talent he otherwise was struggling to hire in other markets, even in markets like Egypt for a whole variety of visa and other logistical reasons.
This is sort of the combo that makes the region really special. High level, but again, spend on consumer is amongst the highest in the world. Maybe not the U.S., but if you take most other countries, we have the highest spend in a lot of these sectors. In fact, food delivery, when the big food delivery champion here, Talabat, was acquired by Delivery Hero just before they went public, and it's a public company, we download their financials and their filings every year and read it. It's the only region that is profitable in the food delivery space in the world for Delivery Hero, just to show you. ARPU is off the charts, and retention's off the charts, and basket size off the charts, and growth rates still just incredible. Lots of amazing stuff in the region.
It is a Dubai story, and it is a UAE story. Abu Dhabi is playing a big role in this as well, but the region is catching up, the greater region. I think everyone now realizes. We used to go out and talk to people about the tech ecosystem, it was like we were talking Japanese, and now everyone realizes that they're either going to have to get with the program or probably die. Everyone, and government included, are basically playing the right game and catching up, but the UAE is still ahead.
Egypt has caught up in terms of number of transactions, and the beautiful thing about Egypt is over the last 10 years, the first wave of Egyptians would thought Egypt was a big country, and it is when you're in Egypt, but it's not for an investor like us who wants to make a massive impact and generate large outcomes. They went through their, "I want to build for Egypt," and then they went for, "I want to build for Africa," and then, "I want to build for the region." The ambition levels with successes is growing. What's amazing about Egypt is you have the Ciscos and IBMs, and Intel has made M&A as well, has chip design factories and establishments in Egypt.
You have a very deep tech pool, and the greatest number of graduates coming out every year joining the talent pool, along with this huge commercialization engine that started also about seven, eight years ago with the likes of the food delivery guys and Jumia, with Rocket and Careem and Uber. Uber is still, I think, number seven in the world, Egypt, sorry, for Uber as a city in terms of number of rides. It's a big country, and you've got this beautiful combination of tech talent, and Mostafa will talk about that. I'm plugging you, Mostafa, right here. With the commercial savviness at scale, working for a company like Careem, which was acquired by Uber for $3 billion just last year, which was our biggest exit in the region. The network effect. The network effect is so important. This is actually N.Y.
N.Y. was not on the scene until 10 years ago, well, 2003, when Kevin Ryan sold DoubleClick to Google for $2 billion. That node has been traced back to have created over 1,000 people that have gone back to mentor, invest, angel invest, co-found, found or become senior leadership, members of team in amazing companies with huge aspirations and lots of capital going to the region. Why am I talking about Kevin Ryan in N.Y.? N.Y., as you've seen, is caught up big time on the tech scene in the U.S., and that is something that we are looking for. Careem, we believe is going to be our node, is already has been our node. You have young Mostafa here, who's an ex-Careemer, and you see this flywheel. There are a few more that we haven't put in there.
A few of them are signed term sheets, so we don't want to disclose them too early, so that people don't go after them too early. Exits have been there, and they are coming, and the more amazing companies get built, the more we will have exits. We personally are sector agnostic. We follow the best founders. Our first fund was a lot of consumer, just bringing consumer services to people in the region. Our second fund, we saw the rise of enterprise. Our third fund, which we just kicked off now, the fundraising for, is seeing a surge again in B2B, building the infrastructure layer for the next wave of consumer, but also fintech. Not fintech neo banks, because it's highly regulated here, so that's going to be a challenging proposition. Fintech and consumer finance and the likes. Last slide.
When we think about the evolution of the ecosystem, and this is, I think, really the most relevant to this audience, hopefully, we knew innovation and business model innovation was going to come out of the region at some stage. We just didn't know when. We didn't actually think it would happen in fund two. The way we think about it strategically is, you need three things to build a massive company. You need access to talent, you need massive markets, and you need access to capital. The evolution is from fund one to fund two, at least in our case, and what we're seeing now with fund three is the talent pool was only in the UAE, Egypt kicked in very nicely, and you're going to hear about that in a second.
Now, our founders are hiring people in San Francisco because work from anywhere has become quite the norm. Before, it was still quite a strange thing to get around one's head. Talent from around the world, but founders based here and engineering teams somewhat based here and then distributed, has been really, really powerful. Markets, Mostafa will talk to you about his global, not just global, emerging markets. When we made the investment on Mostafa, we did a TAM and said, okay, Egypt alone is a SEK 1.5 billion outcome if he gets it right in Egypt. Then we looked at other TAMs that we thought he could take, and it was SEK 3 billion outcome.
I don't want to steal your thunder, Mostafa, but, with the software and the Software as a Service and all the wonderful things you're doing, and the reason I'm mentioning this, and this for you guys, VNV, to help us think through is, private funding is great, but at some stage for these founders to really build the SEK 10 billion, SEK 20 billion outcomes, we're going to have to tap public markets and who better than the VNV team to guide us through that process. That is me.
Thank you so much, Dany. I don't know about the rest of you, but I always find it super inspirational to listen to Dany.
Thank you. Now I'm going to introduce Mostafa. Is that okay?
Go ahead.
Mostafa. Mostafa, we learned a couple of years ago, after having made the investment, had applied for a job as an associate or an analyst at BECO Capital. Thank God whoever he was talking to didn't hire him. He wouldn't be where he is today. I don't think we had an opening. I always think about it and think, "My God, thank God that never happened." Mostafa cut his teeth in the tech ecosystem in the region, initially with Rocket, and then as a market launcher at Careem. He was reporting straight into Mudassir, the CEO, who is just a phenomenal leader and a phenomenal entrepreneur.
Mostafa, this is another amazing thing about Mostafa, is while he's Egyptian, he's a global citizen because he has worked and operated in marketing and growth and ops and all these wonderful things that you need to know to build a big business, in Egypt, in Pakistan, in Kenya, and in Singapore and Malaysia, Southeast Asia, with all of these former employers before he stepped out to start Swvl. He is also recently Well, I was very proud, I was sent by a friend of mine in Egypt. They produced a list of the wealthiest Egyptians and the godfathers of Egypt and the bankers of Egypt, and then it was the ones to watch for. Mostafa was on that list, and I was so proud because it's so well-deserved. By the way, before I shut up, happy birthday, because it's his birthday yesterday.
I love you.
I love you too.
Grateful to you, Dany. Thank you so much for the intro. Truly honored.
Shall I hand you over the screen?
Sure. Please.
Okay. Oh, I just did something silly. I think. Can you guys see my screen now?
Yeah. Perfect. Thank you.
Amazing. Again, thank you so much, Dany, for the intro. Thank you so much, VNV team, for hosting me. I am truly honored. You guys have been much more than investors to us. You guys have been more like our co-founders in a way, and we are truly grateful to you guys. Yeah, maybe I can start. Dany introduced me, so thanks be, he is always too generous with his intros. I am Mostafa Kandil. I am a petroleum engineer. I worked at Rocket Internet, part of their venture development team, which is the team that manages. They had this global team that manages different Rocket ventures around the world. I was part of this team in the Philippines. We started a car classified company. We grew it quite nicely. It became the second-biggest car classified in the Philippines.
Rocket acquired a food delivery company in Egypt, joined this food delivery company to restructure it, make it a bit more efficient, integrated within Rocket. Luckily, I came across Careem around four years ago, joined as part of the expansion team. My job at Careem basically was to expand Careem, myself and team, around the world. At that time, we launched Careem in eight cities, which back then was around one-fifth of the footprint. I was 24. I thought that if I stay longer, I will just get too comfortable. I really liked Careem at that time. I really enjoyed it. It was such a thrilling experience, being always with your backpack, traveling everywhere, launching Careem. It was a very thrilling experience, very impactful.
I thought to myself, if I stay longer, I'll just get too comfortable. I'm not a person who would ever want to be in a comfort zone. I quit in just six months, went back to Egypt, started Swvl. The inspiration was that Egypt is a very touristic country, as all of you guys know. At that time, there was a Russian plane that got attacked. That meant that there was a travel ban on Egypt. Egypt was struggling quite a lot with a very strong slowdown in tourism. That meant that you grow up in a city like Cairo, you see all of these very high-quality buses running around, buses that work with tour companies, with schools, with universities, all of these.
Mostly tour companies carrying tourists all day long, you never question what else do they do. At that time, the hypothesis was that given that tourism now is suffering quite a lot, there's a potential opportunity, basically, that these buses are sitting around doing nothing. The idea was, how do we build our own mass transit system? In a city like Cairo, where transportation is extremely broken, buses doesn't run on a schedule, buses barely exist. If you're a woman and you take a bus in a city like Cairo, you will most certainly get harassed. A bus that should carry 50 people carries 200 people. On the other end of the spectrum, there are the Careems and Ubers of the world.
If I'm an Egyptian, could be an engineer actually, and I make SEK 500 a month, which is a good salary in a city like Cairo, and I have to pay SEK 20 a day just to go to work and come back because I work a bit farther from where I live, it's a very big chunk of my salary that I really cannot do on daily basis. Not only this, actually the government has absolutely no incentive whatsoever to invest in this massive infrastructure. They've been destroyed several times, and it's not only the case in Egypt or in Cairo, it's the case around emerging markets in general, that public transportation is very strategic and is the backbone of the economy. Without public transportation, people cannot go to work, basically, the economy stops. So it's a necessity. They're regulators, they're not really operators.
Whenever they invest in mass transit, whenever they try to build it's extremely subsidized, it deteriorates in health very quickly. They're not really able to maintain it, and it goes back to square one. Just to give you some examples, Cairo, for example, spends around $200 million per year just running the public buses. They generate $16 million, one-six million dollars of revenue, and they spend $206 million running the public bus. Just to put this in perspective, the entire R&D budget for the country is $80 million. Imagine if that amount of money can actually be saved and can be rather invested in education, healthcare, so on and so forth. Things that are much more pressing, things that are much more of a priority.
Let alone actually, that while all of these massive investments for a city like Cairo, for example, they're quite massive, they have one of the lowest number of buses per million people. 261 buses for every million people, transporting around three million people a day. Just the entire city of Cairo, which is 25 million people, they have 3,000 buses, pretty much. What we wanted to do, there you have basically a demand that's kind of torn apart between very expensive online transportation, very unreliable mass transit. You have supply, which has two major problems. One is inefficiency. This asset class works only twice a day. Let's say they work with a school, they work with a university, they work with a tour company. They take employees to work, they bring them back, and that's it for the rest of the day.
They're completely empty, so their utilization is around two hours, three hours per day, for the entire day. That's just idle money. Three is you have a government that's really not able to invest in building public transportation, and doesn't really have the capacity, neither the expertise to run this efficiently. What we wanted to do is it seems like a perfect combination, right? We're solving a problem for all the stakeholders. We wanted to build a private mass transit system, a bus that runs on three key value propositions. One is affordability, offering a service that's up to 80% more affordable than taking an Uber. Two is reliability. Comes on time every time. If we tell you have a trip, you definitely have a trip. Three is convenience. It's a nice bus, there's AC, you can pay by cash and card.
That meant that we actually, if you think about it, when Uber came, they were the first, not the first ones, but they were the ones who basically commercialized rides at the tap of a button, in a way. They were really great at solving the medium-range commute. Any commute that's, let's say, 11 km -1 5 km. Anything less than that, the Uber was too expensive because you have to pay a minimum fare, and anything that's more than that, it's also too expensive because it keeps counting per minute, per kilometer, et cetera. Then there came the scooters of the world, Salih Zaiy, I know you're an investor, and my investor I'll tell you my take. They solved great for the very short commute. A commute that's one to five kilometers.
That meant that they offered a very good service for people who work in the park, for people who want to commute short distances, et cetera. Imagine taking a scooter basically for 20 km, it's pretty much impossible. Imagine, let alone in emerging markets that have very broken infrastructure, very broken roads, this is just not possible. If you think about it, for the long haul commute, any commute that's, let's say, 12 km, 15 km, the biggest revolution that came onto it was Wi-Fi on the bus. There has been never anyone who thought about how do we rebuild mass transit, how do we rethink mass transit? That meant a great opportunity for us and for emerging markets, because in a way, we can leapfrog the nations that we work in. If you think about, let's take the financial industry.
Think about M-PESA in Kenya, for example. What M-PESA did in Kenya is they've taken a very cash-driven society, pre-M-PESA, and they've managed to skip at the card era. They completely skipped the card era and went straight to mobile money. That meant that for us, and in emerging markets, we have exactly the same opportunity for emerging markets. How can we allow governments to basically not anymore build public transportation, but actually go straight from very unreliable, very inconvenient, very inhumane mass transit to world-class, very privatized, very profitable mass transit systems that delivers on affordability, convenience, and reliability that can be taxed, that the government can actually make money out rather than invest in. We found our sweet spot from that point was middle-class commuters. The majority of a city like Cairo, for example, was middle class.
People who want to go to work, people who are university students, employees, especially women, whether you work in a corporate or you go to school, whether you want to go on the weekend, want to go out. All of those young millennials who were aspirational to find, to commute. There's a stigma against using public transportation in a city like Cairo. All of these millennials who, straight coming out of the revolution, were ready to question the status quo, adapt new things, et cetera. Swvl was kind of born. We started three years ago now. We've grown quite nicely. Just to give you some perspective, we do hundreds of thousands of bookings every day. A booking for us is a seat booked on a bus.
We have thousands of buses running across the road, we're one of the biggest fleet providers across the entire world. We have hundreds of thousands of customers taking Swvl every day, every week, every month. We've grown quite nicely. We are now actually the biggest in the bus space globally. Other players came. I don't want to take credit for it, I think we've shed some light in the industry. Players such as Careem and Uber launched buses for the first time globally in Cairo, actually, because we've taken a massive market share from both players, Cairo's one of the biggest cities, as Dany mentioned, for Uber globally. They kind of launched the buses around two years ago. Other players, such as Via, Shuttl, Ola, et cetera. Luckily, we've outgrown everyone.
We've managed, we're now the biggest in the bus space globally, across almost every metric. Except revenue, because revenue, we're in emerging markets, so it charges with pounds and shillings and KES versus USD and EUR. Yeah, running public transportation is something that extremely is not as straightforward as running cars in general. It's something that, imagine you are trying to give a customer a promise that you're going to show up on time in a city like Cairo, where the average commute is an hour and a half. Scale that promise over thousands of buses running at the same time with this extreme unreliability where the driver can switch off his phone 10 minutes before the trip and not show up, this is a massive challenge to solve for.
Imagine actually even that you have to design a public transport network across these markets, basically, the extremely complex markets, and you have to design all of this network to maximize for utilization, maximize for efficiency, to minimize the dead kilometers, to maximize the efficiency of the vehicles, to increase the marketplace efficiency. Our team, we were looking actually for some figures on what we came up with, something called effective utilization of the asset, this asset class, the buses. We found out that actually there's something called load factor. There are three metrics that I'm going to walk you through. There's utilization, which is number of seats booked on a bus. There's a load factor, which is number of monetized kilometers, so number of paid-for kilometers over total traveled distance.
There is asset utilization, hourly utilization, which is how many hours per day does the vehicle actually work. In the industry that we're in, before Swvl, if you multiply all of these factors together, the effective utilization of this asset class was around 8%. Imagine all of the buses around the world are utilized at 8% of their potential, right? Imagine if you can take this 8%, Swvl now, we're at 17%, and we're making money. Imagine if you take that 17% to even 50%, right? The total of all of these utilizations. That's a massive margin. That's an entire revolution to this space. Imagine overnight, you don't need half of the number of buses around the world, basically. It's actually a revolution to the entire bus manufacturing industry. Yeah. We, as I mentioned, we started three years ago.
We raised $92 million so far. Luckily, we have BECO, Vostok, as our biggest investors. We have a few of the biggest investors in the region. We have investors from all the way from the U.S., all the way to China. We've gathered quite a great set of investors we're quite lucky to have. I'm going to speed up. All of this, then COVID happened, and COVID for us was a massive opportunity, actually. I think we benefited from COVID the most, probably everywhere. It was actually quite great for us that it happened. Luckily, I think we built a culture at Swvl that everyone is a very strong problem solver. Everyone in the business team, everyone can code, basically, across the company, everyone can code.
That meant that when COVID came, of course, when a company grows that fast, the company changes every month and you prioritize growth over efficiency. When COVID hit, that meant that given that we are a highly variable cost kind of business, we're able to bring our costs to 20% of what it used to be, and in a matter of a week, we can halve. Not only that, go very quickly from the defense mode to the offense mode, and how do we actually use this as a massive opportunity. We've sat down, and this was pretty much the only time where we've got a once in a lifetime chance to work on efficiency, right? There was no growth to pursue anymore, and there was only efficiency at that time.
Luckily, as I mentioned, because our team, everyone is a problem solver, everyone can code. That meant that you have 500 people who are extremely capable, who you can throw them at any problem, and you know that whatever their domain is, and you know they can solve for it, right? We sat down, we structured, we actually outlined every single problem we have inside the company, 100 problems. Let's say we are not measuring the supply acquisition funnel in Kenya, we need to increase the LTV of X by X, so on and so forth. Many kind of problems, around 100. We started creating these cross-country squads, people, one person from Egypt, one person from Kenya, one person from Pakistan, one person from Dubai. These cross-country squads, we started assigning them under single threaded owners, basically.
We started assigning them these sets of problems. They started solving for it. We stayed for three months at a very, very minimal burn. Now we bounced back, where this month we're at almost at 70% of pre-COVID levels. It's been a couple of months, two and a half months. We are growing at 40% month-to-month. We expect to be fully recovered in the next couple of months. Hopefully, the target, I just came back from our yearly summit, our plan is by end of 2021, is to be the second, but the fastest unicorn in the Middle East, Inshallah. Yeah. Basically what happened is we managed to take a deeper look at our business and break it down into three main categories. A category what we call retail, which is purely going after the normal consumer, the one that I've mentioned so far.
There's this massive space, which we call transport as a service, which is how do we run Swvl for anyone, for corporates, for schools, but also governments, right? Governments that if a country like Egypt basically has 200 buses, it has to spend $200 million per year. With our technology, we can bring that to SEK 50 million or to SEK 100 million, right? Imagine a 50% or 75% cost saving for the country of what they spend on a line item such as transport, right? It's quite a big revolution for them. Not only on the OpEx level, but also on the CapEx level. Imagine if you, overnight, you can actually let go of these thousands of buses because you have a much better planned network, you have a much more efficient planning. That in the end, you can let go of all of these CapEx also.
We have the transport as a service and we have the intercity, which is connecting cities together, which we've seen already a 300%, 350% growth from pre-COVID levels, actually. Now that meant that we have a very strong value proposition across every category and so on. That meant that our original approach of going to every country, expanding the three categories, which was letting us to emerging markets, is not any longer needed. Every category on its own has a very strong value proposition. Now we're going after world domination in a way, where we're going through a very category-driven expansion, where retail can be focused on cities like Mexico City, cities like São Paulo, cities like Nairobi, Cairo, Karachi, so on and so forth.
The transport as a service can be expanded into Latin America, can be expanded in the U.S., Australia, so on and so forth. The intercity can be in a continent like Europe, for example, where there's FlixBus, for example, we're as big as FlixBus, in terms of volumes, much more, much bigger in terms of buses. They do 10 times more revenue because of the ticket size. In terms of technology, we're very well advanced. There's absolutely no reason why we shouldn't compete. Yeah, that's it for me. Ready for any questions.
Fantastic. Thank you so much, Mostafa. Super impressive company, I must say. Björn, do you want to kick us off with questions? If there's any questions from the audience, you know how to do it by now, but you punch me into chat or Q&A, and we'll read them up.
Maybe first question on potential expansion here on the slide that's showing right now. We have a few. Are there anyone that's extra prioritized or, I guess, put it another way, in 12 months time, how many markets would you expect to be in compared to today's three?
Hello, I don't want to overpromise, but we're trying to get to a phase where we launch a city per week.
That's good. Also maybe if you could elaborate a bit on what's the key characteristics of the cities you want to enter into? Do they need to be a minimum certain size or what kind of dynamics need to be present before?
Yes.
You look at it as an attractive market?
Yes. Every category has its own characteristics. You have the retail category, which is focusing on emerging markets, megacities that, let's say, have 10, 15 million plus citizens. Then there's the transport as a service, which is pretty much applicable everywhere. This caters for corporates, schools, and governments. This is pretty much everywhere this can work. Then there's intercity transport and intercountry transport, which also almost everywhere can work. It's very strong in Latin America, very strong in Australia, very strong in Europe. Those are the continents that we focus on. As of the next couple of months, we're ready. Actually, now we just launched the U.A.E. We're launching Jordan next month. We're aiming that by January we're going to be across the entire Gulf. We're going to have Qatar, Bahrain, Kuwait, Saudi, as well as U.A.E. and Jordan.
Those are kind of the Gulf expansion, those within by January, February max. Then we're getting the next, which we're actually hiring for now, is LATAM. We're launching Mexico City, we're launching Brazil. Hopefully after that, we're looking at Australia and Europe. Those are the two continents that we want to get to. Yeah.
Great. We have a question from the audience which reads like this: Could you elaborate on the technological optimization advantage-
Yeah.
versus other operators? What differentiates you?
Actually many things. It's a good question. There are two main things. There's a network. We have a massive network. Why is this super hard to do? Different from, let's say, a ride-hailing. Is that ride-hailing is a very straightforward marketplace. You go, once you have supply and demand in the same place and you have a five-minute ETA, five minutes is kind of the magic number, because this is where most the demand is sparked, where demand grows exponentially for ride-hailing services. As long as you have cars and within a five-minute distance, you're good to go. You have a very healthy marketplace that can grow exponentially. That's ride-hailing. For buses, there's a very strong added element, which is the network. You have a network in between. Only if you have a route that's at a good working distance.
At exactly the right time, because you have to go to work. You have a time commitment, and at a good price. Only when you have those three factors, you can take a route. You can take a bus going from A to B. Even if it's for free, it's irrelevant. If I want to be at work at 10:00 A.M., but there's a bus for free and will take me there at 11:00 A.M., I will not take it. It's completely irrelevant for me, even if it's for free, because I have to be at work at 10:00 A.M. Now you have a very complex network. You have to, one, plan this network. You have thousands of buses. This is an extremely difficult optimization problem. You're toggling between several things.
You want the customers to walk the least distance possible, and you want the driver to take a trip from the closest location to his home, and you want, let's say, if he's going to do four trips a day, the bus on Swvl, you want him to start every trip that he ends, start the next trip from where he ended. To minimize all of the inefficiencies in between. You want him, at the same time, to end his four ride plan, let's say, where he started. Okay. That's one. Now, let's take this a bit more. You have a demand that you're trying to map against. You have a network that you're trying to optimize how this flow across of the bus across, how do you make it one continuous trip throughout the day? Because it's a cost function, right?
Any extra kilometer is an inefficiency. You have these plans, and then you have a set of captains who live in across the city who are trying to, whenever they sign up, you're trying to give them exactly the right plan that works for that person, that minimizes his from home to work kind of distance and from work to home distance. Okay? That's one. Okay? Two, now we have this network design. Inside the network itself, every day there's a certain predictability to demand, but there's a certain demand pattern. There's a daily seasonality, right? For us, Sunday, for example, is a week day. Sunday is the highest day of the week, and Thursday is the lowest day of the week, right?
How do you throughout, while you can plan very well a fixed route and with a high degree of accuracy, but the commuter demand not necessarily is the same every day. How do you maximize their utilization? You have a fixed cost anyway, right? The bus, as long as it's going from A to B, you're going to pay for it. It's a good and a bad thing. It's a good thing because if you're able to actually pay for it, if you're able to achieve that breaking utilization, the margin is insane, and it's all yours. It's 40%, can go up to 40%, 50%. That means also, if you run below the breaking utilization levels, you burn money.
Now, while the bus is going from A to B still, how do you dynamically move it across this, let's say, 30 kilometers route, to maximize demand? One, while keeping the customer promise. Any customer who's booking across this route, you're giving him a promise. You're telling him, "I'm going to show up at 8:00, and I'm going to drive you at 9:00, and you're going to get to work at 9:00." You're trying to solve this very computationally heavy, very expensive problem, real time, across thousands of routes, across emerging markets that are extremely unreliable. That's two. Three is, now you have a set of users. Those are price-sensitive users, because they are commuters in emerging markets who are mostly middle class.
Now, this price-sensitive user, you want to price to him exactly what he can pay, not what he wants to pay, what he can pay. That means that pricing is a super difficult problem to solve here. Now, if you price too low, you cannot break even. If you price too high, you will lose money because you will run below utilization levels and nobody will take your service. How can you price every seat in the bus at a different price point to maximize the revenue of the week? Take airlines as an example. How do airlines manage their pricing? It's a function, basically, if I book so early, there is an early bird pricing keeps increasing, and then it starts going down.
How can I, every hour, basically know the probability to achieve a certain bus utilization, and then every hour run this across the entire network, see what actually bus utilization I have achieved, and take a pricing action, whether to increase price, reduce price, because either I can be leaving money on the table or either I can be actually burning money. That's a very fine balance. At every hour, at every bus, at every moment across the entire network. It's a very complex pricing mechanism. Four is the promise bit of it, which is all of that, you're in emerging markets as well, which are extremely unreliable. The president can be passing today from A to B, and they can shut down the entire city, and you lose load.
In the end, you're promising a customer waiting in the street, who you have to show up for. You have a certain set of drivers or captains who you have no commitment against them. They can switch off their phone and not show up. How do you manage this very complex operation real time? For us, we have actually more number of buses than the Cairo Transport Authority. They have 3,000 employees. For us, the entire company is 500 people. We have more buses than they are. We can run Cairo, for example, with 30, 40 people with the same number of buses that the Cairo Transport Authority does. This is just like to walk you through some of the optimization problems that we have to solve for. There are much more, but just for the sake of time, I'll stop here.
Super. Thank you. To follow up on that last part, a bit more basic question from one participant in the audience. Could you elaborate a bit more on the supply side? Who owns the buses? How do you sign supply up to the service, et cetera?
Basically, we never own anything. In these markets, as I mentioned, these buses, this asset class, was suffering from two main problems. One is the inefficiency. Piece driven, they were working only twice a day, and for the rest of the day, they just sit around, not doing anything. They're just pretty much empty. The second thing is seasonality. A lot of them work, or traditionally, have worked with very seasonal businesses. They work with either schools, which work eight months a year. They work with tour companies, which works, let's say, six months a year. They work with corporates, which are a bit more stable, but for them, they just do two trips a day, so it's an extremely inefficient operation. Now, we came to these guys and we said, "Okay, you used to get EGP 100 per trip from this corporate.
I'm not going to pay you SEK 100, I'm going to pay you SEK 60. Instead of you doing two rides a day only, I'm going to let you do six. On an aggregate amount, you're making a lot more money with no opportunity cost. On a price per ride, I'm paying you less, yes, on aggregate, you're making a lot more money. You're utilizing your asset much, much more. How do I acquire my supply? There's several channels. We have these opportunity centers across the city, and in a way, we have these very massive kind of acquisition teams that go on down the door to different governments, that go to different parts of town, basically, that build that fleet capacity. We have several channels. We have actually many channels.
We have a channel which we call the Tribidu, which is basically a very turbo, which is a sales channel. We try to make every bus driver or every actually one in our network a salesperson. They work on commission to get us drivers. We have referral programs. We have our own acquisition teams that go on the street. We do a lot more guerrilla kind of approaches, where we go to the schools and sign up the buses that they work with or the corporates, et cetera, then. We go a bit unorthodox on how do we acquire buses, and we build this massive fleet. Yeah.
Another question here is how long does it take to gather enough data to optimize sufficiently if you're number one?
Yes.
Does number two have any chance to compete?
Yes. Actually, the first question, it depends on the city growth. Of course, the good thing is that it just gets better and better. You can launch with a very first set of data. We use search data, for example, as a starting point. While people don't know the app, they start searching. We have our own tools, basically, that cluster that and tells us which route that we should run, basically, and we start building. As the demand grows and we build more data, it just gets more and more efficient. Does a second mover have a chance? Absolutely not, because we've seen it, for example, with Careem, for every booking that we had to do, we were burning SEK 1, they were burning SEK 7. That's because it's a vicious cycle. To get to that level of optimization, of utilization levels, you're paying for supply regardless.
To get to that level of utilization, it's extremely tough problem to solve that nobody has solved before. We're already actually filing for patents for the technologies that we have built so far. It's an extremely tough problem to solve, requires a lot of learning. The pricing technology there, we've taken what airlines and what scooters across the world have done, and we've created it for buses, basically for the first time. That means that for every $1 that we have to spend, any second, or even if there's some person before us who started something like Swvl in any country, the level of efficiency that we operate with is very hard to match. That means that we can very, very quickly blow any competition away, because for every $1 that you need to spend, to match the same efficiency, you need to spend $10.
It's super hard for anyone to compete.
Thanks. Another question here from Williams is, in this expansion that you're looking for over the next year and forward, how long will it take, for example, to break even in a new market? How capital intense will it be to launch, let's say, in Mexico City?
Yes. For the expansion that we're prioritizing is the TaaS expansion and the intra-city expansion. TaaS expansion is profitable from day one because you work with entities, B2B or B2G entities, who pay you. You're profitable from day one with very, very high margins. It's very rare to see a business that can make this margin on $100,000, on $1 million, on $100 million, is the same margin. You're making great margins from day one with very, very skeleton teams, very small teams that can operate this business because it's highly automated and just start printing cash in a way. These are the TaaS expansions.
For the intra-city expansions, these are very high-margin business, require a bit of investment, but the margin there we're seeing, for example, in a city like Cairo, which is the ticket fare even is less than a lot of markets that we can go to, it's 30%-40%, even sometimes gets to 50%. That margin you can pretty much be profitable on very, very quickly. You add more buses, you get to profitable, then you add the next batch, the next batch, the next batch. Retail is the one that requires a bit of investment, and this is kind of the very strong growth, massive opportunity, basically. The few of them are massive opportunities, but the retailer is the massive kind of B2C opportunity. This requires a bit of investment, so we are prioritizing it.
Hopefully, after our subsequent round, the existing markets will be very, very close to profitability anyway. Any future fundraise that we're doing is purely for growth. Very minimal of it will be spent in the existing markets.
I have a question for Mostafa.
Please.
Is that okay, guys?
Yeah.
Mostafa, the TaaS is so exciting and so scalable and so high margin and so applicable to corporate and public and private transport. Do you envisage being at the core, a TaaS business, and would you ever need to be an operator as well? I know that being an operator has given you the extreme level of depth and granularity of being able to build out the most efficient TaaS solution. When do you think, "I don't need that anymore," and sort of go out and become a powerhouse?
Very good question, Dany. There are two things. One is the B2C business is our business where we're building this technology. If we didn't build that massive size fleets running across the world, it's impossible to build that technology. It's very, very hard. You cannot solve this problem, and that's why, as I was saying, we're solving this problem for the first time at that scale. We are actually filing patents on how we're solving it, because nobody had that massive fleet except governments, and governments are not really very incentivized to invest in, especially in emerging markets that suffer from that, to invest in solving this problem to that extent. That's one. Two is, the beauty of this is that the more you're able to cross-utilize your fleet across the three categories, the more the fleet becomes profitable.
Now, the bus, we've agreed that there's an effective utilization of assets, right? The more you're able to increase that effective utilization of assets by utilizing it across every day of the week, across different types of. There are different peaks of demand, right? The demand of travel, for example, of the weekend, where there's no commutes. It supplements each other. The demand for schools is at 7:00 A.M., while the demand for call centers is 11:00 P.M., let's say, right? The more you're able to bring these pockets of demand, the more you're able to utilize your fleet, the more you increase the effective utilization of the vehicle, the more you become a lot more efficient, and the margins increase accordingly.
Fantastic. Beautiful.
Yeah, maybe a final question. Looking at the average frequency of user as, let's say, one of your mature markets in Cairo. The average user, do they use Swvl every day, or is it a few times a week, or less than that? Elaborate a bit.
Yes. We worked pretty much for the week, for the commuter demand, 22 days a month, basically. They use us an average of seven times, and that's a great opportunity for us because our north starts to get them to use us 44 times a month. How can we get there? All of that is a share of wallet that we were targeting, that we're getting into. That's how we get into it, by a few things. One is building very strong pricing technology, which is how do you give the right price? I'm a user. Traditionally, our businesses look at, they have this breakdown of users, let's say high value, mid value, low value. Low value are usually the most subsidized users, let's say.
The way we look at it, if a low-value user is willing to pay me KES 10, how can I actually take that KES 10, because I have a fleet that's running anyway, as long as there's no opportunity cost, as long as it's not taking the place of any other person, that bus, it's actually money that I'm leaving on the table. How do I price for every user, as I mentioned, and cross it with which bus he's going to take and what will be the utilization of that bus, and give him exactly the right price point that I will not cannibalize myself in, and at the same time, take that money that he's willing to pay? Pricing is a very important thing. The second is how do you lock them?
We just launched, for example, right before COVID, and when COVID hit, we couldn't scale, but packages, for example, how can we move everyone from a ride per ride to a month per month. Buying a subscription. That you're buying 30 trips a month. How do I price even that package for every user depends on how much he can pay. That's the way we look at it. Yeah.
Super. Thank you very much.
I think there's one final, sort of, what do you call it? Not a question, a comment, suggestion, which reads, "Mostafa, please don't sell the company, ever." Keep on trucking.
I promise you. We want IPO.
Our friend in Italy.
We want the responsibility to keep him private as long as possible. We're going to be there for his follow-ons.
Yeah. Hey, guys. Thank you so much for joining on a Friday from Cairo and Dubai. Fantastic. Everyone, thank you for joining and listening in, and for the good questions, and this has been fun. Thank you so much, everyone.
Thank you so much, guys, for your time. I'm truly honored. Thank you, guys. Take care. Bye-bye.