CMD 2020

Oct 16, 2020

Slides

Hi, everyone. We're sort of we're 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 it, but I've been starting to enjoy these 3 years of sort of gatherings that we're soon getting the technique ready here for Friday afternoon here in Stockholm. So welcome, everyone, and a particular welcome to Dani and Mustafa, who are our speakers today. So Dani runs the best investment company in the Middle East, Becco, who we have invested together with for several years and in several deals. And staff at Candideel is the founder of Swivel, which we own together with Danny. I think, Danny, you invested before us and then helped us invest. So we're super, super grateful for that because Swivel is one of our rising stars come a couple of years. And then we think Swivel will give Babylon and Blah Blah and Voy a run for the money because it's going to be big. So this is so we'll run this in the usual sort of fashion. Damir will introduce to the region and it's yes. And then the Mustafa will continue with Swivel specifically. So over to you, Danny. Thank you, Per and Bjorn. 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 slide through some slides that hopefully give you a deeper insight into what's happening in our region, vis a 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 and A. So at Deco, we're a 2 GP firm. We manage about $200,000,000 AUM. We're an early stage investor, so our ideal entry point is just before the A. That we have a concentrated strategy where we basically concentrate and back and go heavy behind the breakouts like Swivel. You'll hear more about that in a moment. We have quite a diverse team, and I think the reason that I put this up here is two reasons. Number 1, we are unusual in the way we're structured, and I'll tell you why that is, particularly in this part of the world. So we have 2 people here in the firm that's 20% of the headcount that do nothing but fundraising and not just fundraising for us, we only raise once every 3 years. It's fundraising for the portfolio, for people like Mustafa who want to concentrate on running the business and then 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 and we're also doubling down on this in the firm is that we are adding people and data to basically have be able to go granular early on everything from port analysis to unit economics to growth economics and really understanding product market fit as quickly and as early as we possibly can and to maintain discipline when we go hard behind the breakouts like Swivel. As a fund, we hold ourselves to very high standards, so we performed better than the equivalent vintage in the U. S. Top quartile VC in both our funds, and Karim has returned the entire fund and some. Now here's where it gets interesting. So we spend we've been doing this. This is the 10th year we would have been doing this. And we started from very small, humble beginnings, 2, 3 people in an office trying to figure out what to do and when this ecosystem would mature. And it's maturing beautifully and we're going to talk about how that is. But 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 Bjorn so that they we know we get to know them, they trust us, they like us, they can we know what they want, so we can show them stuff so that they can invest alongside us. And I'm glad to say that we've done this with VNB several times now. But again, a lot of these names that you see up on the screen here, 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. And 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 Mustafa and others. Just to show you the real opportunity here to give you a bit of data. Now I've shown you the outliers, right? We know that the most amount of money, dollars going to venture per capita is in the U. S. And that's at about $3.30 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 $8.50 per capita. We're at $3 in the region. Now 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, very large outcomes and they really just need the money. Now if you just a quick SKU here, this is MENA and MENA is the GCC Egypt and the Levant. It's about 180,000,000 to 200,000,000 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 $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 bait.com back in 2000. So my gray hairs are there for a good reason. But in that decade, 2010, a total of $50,000,000 $50,000,000 was invested in the technology ecosystem. If you look at the Israeli ecosystem or any other ecosystem, it's in the tens of 1,000,000,000 if not more. So 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 been it brought us many silver linings and I'm sure you're going to hear about those from Mostafa. But most of the companies that we've invested in have seen the same V shaped recovery or they've 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 this to what happened within the pandemic. So we had very few companies, 4 from 2010 to 2,005 that were above $100,000,000 mark. We've 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're sort of just before the A, Series 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. And what we are struggling with in the region, which is why we've configured ourselves to have 2 people in fundraising for a number of years now is this desk value, which is the larger Bs and Cs. And that is why we spend so much time, hopefully building trust and strong relationships with our friends at D and D 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 3 folds. It's sort of a 3 pronged investment thesis. And it's high level and we can go deep in the Q and A if you like. But basically, the GCC is like the world's best kept secret. And the GCC, for those who don't know it, is Saudi, Bahrain, Kuwait, UAE, Qatar. It's those Gulf countries. And while they are probably 80,000,000 in population or maybe even less, they have some of the highest ARPUs, both across enterprise and across consumer. And so and very, very low CAC, which is a really profitable relationship. Then you have Egypt and Mustafa is the best ambassador for what can be done in Egypt. You have Egypt with a very large 100,000,000 people, about 40 some 1000000 have access to high speed Internet connection and sort of bandwidth on their phones. But 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 is not it's quite sometimes broken and lots of headwinds. So if you can build something massive like the Mustafa had at Swivel in Egypt, our thesis is you can take that and you can and it's such a big market. You can build to scale in a market like Egypt, you can build that anywhere. And particularly in emerging markets, because the problems that we face in emerging markets, particularly when Mustafa 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. And so, Mustafa is helping move people around and take them to their offices and back. That transports to Middle East and Africa, Southeast Asia, Latin America and so on and so forth. And I'll tell you why Southeast Asia and Latin America with Mustafa specifically is an important comparison point. And 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. And tax free for the most part and 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 and get to anywhere in the world and service your the greater area and really build a global business out of Dubai. And it's easy and Mostafa will talk to that, I'm sure. And 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 him to hire global talent he otherwise was struggling to hire in other markets and even in markets like Egypt for a whole variety of sort of Visa and other logistical reasons. So 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 at Talabat was acquired by Delivery Hero just before they went public and it's a public company, so 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 in Europe, just to show you. And ARPU is off the charts and retention is off the charts and basket size off the charts and growth rates still just incredible. So 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, when 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. And so everyone and governments included are basically playing this the right game and catching up. But the UAE is still ahead. Egypt is 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. And so 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 and the ambition levels with successes is growing. But what's amazing about Egypt is you have the Ciscos and IBMs and Intel has made M and A as well, has chip design factories and establishments in Egypt. So 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 7 years ago with the likes of the food delivery guys and Jumia with Rocket and Karim and Uber. Uber is still, I think, number 7 in the world Egypt, sorry, for Uber as a city in terms of number of rides. So 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. And with the commercial savviness at scale, working for a company like Careem, which was acquired by Uber for $3,000,000,000 just last year, which was our biggest sector in the region. Now the node effect. The node effect is so important. This is actually New York. New York was not on the scene until 10 years ago when well, 2,003 when Kevin Ryan sold DoubleClick to Google for $2,000,000,000 and 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. Now why am I talking about Kevin Ryan in New York? Because New York, as you've seen, has 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. It already has been our node. You have young Mustafa here, who is an ex creamer, and you see this flywheel. There are a few more that we haven't put in there. A few of them are signed turn 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 don't have a we're sector agnostic. We follow the best founders. But 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. And our 3rd 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. FinTech and not FinTech Neo Banks because it's highly regulated here. So that's going to be a challenging proposition, FinTech and so but consumer finance and the likes. Last slide. So 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 II. But the way we think about it strategically is when you need 3 things to build a massive company. You need access to talent, you need massive markets and you need access to capital. And the evolution is from Fund 1 to Fund 2, at least in our case and what we're seeing now with Fund 3 is the talent pool was only in the UAE, Egypt kicked in very nicely, and you're going to hear that 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. And talent from around the world, but founders based here and engineering team 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 investments in Mostafa, we did a TAM and said, okay, Egypt alone is a $1,500,000,000 outcome, if he gets it right in Egypt. And then we looked at other TAMs that we thought he could take and it was $3,000,000,000 outcome. I don't want to steal your thunderbolt, Papa, but with the software and the task order and the service and all the wonderful things you're doing, we and the reason I'm mentioning this and this for you guys, D and D, to help us think through is private funding is great, but at some stage for these founders to really build the $10,000,000,000 $20,000,000,000 outcomes, we're going to have to tap public markets and who better than the VNB team to guide us through that process. And that is me. Thank you so much, Juan. It's I don't know about the rest of you, but I always find it super inspirational to listen to Dalmies. Thank you. Now I'm going to introduce Mustafa. Is that okay? Go ahead. So Mustafa, we learned a couple of years ago after having made the investments, had applied for a job as an associate or an analyst at Betco. Thank God whoever he was talking to didn't hire him. He's the only way he is today. I don't think we had an opening. But anyway, I always knew about it. My God, thank God that never happened. But anyway, so Mustafa 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 Mudassar, the CEO, who is just a phenomenal leader and a phenomenal entrepreneur. And Mustafa, this is another amazing thing about Mustafa is while he is Egyptian, he is 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, Malaysia, Southeast Asia with all of these former employers before he stepped out to start Swivel. He is also recently was I was very proud that 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. And most of them was on that list, and I was so proud because it's so well deserved. And by the way, before I shut up, happy birthday because it's his birthday yesterday. I love you. So great to see you, Danny. Thank you so much for the intro. Truly, truly honor your all. Shall I hand you over to Sue? Please. Please. Please. Okay. Now let's Can you help, James? I just did something silly. I think can you guys see my screen now? Yes. Perfect. Thank you. Amazing. Again, thank you so much, Danny, for the end too. Thank you so much, D and D team, for hosting me. I'm truly, truly honored. You guys have been much more than invested to us. You guys have been more like our co founders in a way. And we're truly, truly grateful to you guys. So yes, maybe I can start, Danny introduce me. So thanks to the it's always too generous with his interest. But I'm Ussav Van Diehl. I'm a petroleum engineer. I worked at Proct 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. As part of this team in the Philippines, we started a car classified company. We grew it quite nicely. It became the 2nd biggest car classified in the Philippines. Then Rocket acquired a food delivery company in Egypt, joined the food delivery company to restructure it, makes it a bit more efficient, integrated within Rocket. Then luckily, I came across Careem around 4 years ago, joined as part of the expansion team. My job at Careem basically was to expand Careem, myself and the team around the world. So at that time, we launched Careem in 8 cities, which back then was around 1 5th of the footprint. Then 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. I really saw such a thrilling experience being always with your backpack traveling everywhere launching Careem. So it was a very thrilling experience, very impactful. But I thought to myself, if I stay longer, I'll just get too comfortable. And this is not in the time. I'm not a person that who would ever want to be in a comfort zone. So I quit in just 6 months, went back to Egypt, started Sweden. And the inspiration was that there was Egypt is a very interesting country as all of you guys know. And at that time, there was a Russian plane that got attacked, right? And that meant that Egypt there was a travel ban in Egypt. Egypt was struggling quite a lot with a very strong with a very slow with a very strong slowdown on in tourism. And that meant that you always 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. But you never question what else do they do. So 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 that, right? So the idea was how do we build our own mass transit plan. 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. Above the 2nd case, 50 people carries 200 people. And on the other end of the spectrum, there are the Koreans and Ubers of the world. But if I'm an Egyptian, could be an engineer actually, and they make $500 a month, which is a good salary in a city like Cairo, and they have to pay $20 a day just to go to work and come back because I live just a bit farther from where I live. 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, right. Not only this, but actually the government has absolutely no incentive whatsoever to invest in this massive infrastructure, right. They've been described 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, there's people cannot go to work. Basically, the economy stops. So it's a necessity, but it's they're regulators. They're not really operators. So whenever they invest in mass transit, whenever they try to build it, it's extremely subsidized. It deteriorates in health very quickly. They're not really able to maintain it and goes back to square 1. Just to give you some examples, Cairo, for example, spends around $200,000,000 per year just running the public buses, right. They generate $16,000,000 $16,000,000 of revenue and they spend 206 $1,000,000 running the public bus. Just to put this in perspective, the entire R and D budget for the country is $80,000,000 right? So 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, right? Let alone actually that while all of these massive investments for us, for a city like Cara, for example, they're passive, We still have one of the lowest number of buses per 1,000,000 people, right? So 231 buses for every 1,000,000 people, transporting around 3,000,000 people a day. So just the entire city of Cairo, which is 25,000,000 people, they have 3,000 buses pretty much, right? So if you wanted to do, there you have basically a demand that's kind of torn apart between very expensive online transportation, very underlieable mass transit. You have supply, which has 2 major problems. 1 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 2 company, they take employees to work, they bring them back and that's it for the rest of the day. And they basically they're completely empty. So the utilization is around 2 hours, 3 hours per day for the entire day. So that's just the idle money. And 3 years, we 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, right? So what we wanted to do, it seems like a perfect combination, right? We're solving a problem for all the stakeholders. We wanted to build a parallel mass transit system, a bus that runs on 3 key value propositions. 1 is affordability, offering a service that's up to 80% more affordable than taking an Uber. 2 is reliability, comes on time every time. If we tell you have a trip, you definitely have a trip. And 3 is convenience. It's a nice bus, there's AC, you can pay by cash and card. And 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 like a type of a bottle in a way. But they were really great at solving the medium range commute, right? Any commute that, let's say, 11 to 15 kilos. Because 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 hour, per minute per kilometer, etcetera, etcetera. And then there came the scooters, otherwise, and tell you, Rani, I know you're an investor, I'll tell you what I think. They sold gate for the very short commute, right? Commute that's 1 to 5 kilometers. And that meant that they offered a very good service for people who are walking in the park, for people who want to commute short distances, etcetera, etcetera. But imagine taking a scooter from basically for 20 kilometers, it's pretty much impossible. And imagine, let alone in emerging markets that have very broken infrastructure, very broken roads, this is just not possible, right? So if you think about it for the long haul commute, any commute that's, let's say, 15 kilometers, the biggest revolution that came on to it was Wi Fi in the bus. There has been never anyone who has thought about how do we rebuild Match Stranded, how do we rethink Match Stranded. And that meant a great opportunity for us and for emerging markets because in a way we can leapfrog the nations that we work in. Because 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 out the card area. They completely skipped the card area and went straight to mobile. Money. And that meant that for us. And in emerging markets, we had exactly the same opportunity for emerging markets, right? How can we allow governments to basically not anymore build public transportation, but actually go straight from very, 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 the government can actually make money out rather than invest in, right. And we found our sweet spot from that point was middle class commuters, right? The majority of our city like Cairo, for example, was middle class, people who want to go to work, our university students, employees, especially women, whether you work in a corporate, whether you go to school, whether you want to go on the weekend, you want to go out, all of those young millennials who were aspirational to find to commute who didn't have the stigma of using there's a stigma in this public transportation in the city of Cairo. All of these millennials or straight coming out of the revolution were ready kind of to question the status quo, adapt new things, etcetera, etcetera. And then Stryvild was kind of born. We started there 3 years ago now. We've grown quite nicely. So we just to give you some perspective, we do hundreds of thousands of bookings every day. A booking for us is a seat booked and a bus. We have thousands of buses running across the road. So we're one of the biggest fleet providers across the entire world. We have hundreds of thousands of customers taking Swivel every day, every week, every month. So it's grown quite nicely. We are now actually the biggest in the buzz space globally, where we other players came. I think we I don't want to take credit for it, but I think we've shed some light in the industry. But so players such as Careem and Uber launched buses for the 5th time globally in Cairo actually, because we've taken a massive market share from both players. And Cairo is one of the most of the biggest cities, as Danny mentioned, for Uber globally. So they kind of launched buses around 2 years ago. Other players such as Via, shuttle, Ola, etcetera, etcetera. Luckily, we've outgrown everyone. We've managed we're now the biggest in the bus space globally across most of on-site metric, except revenue because revenue we're in emerging markets, so it's charged with pounds and ceilings and PQR versus U. S. Dollars and euros. So yes, running public transportation is something that's 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 with average commuters an hour and a half running thousands of scale that promise over 1,000 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 you 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 metric to maximize for utilization, much, much for efficiency, to minimize the dead kilometers, to minimize the efficiency of the vehicle, to increase the marketplace efficiency. We've seen we were looking actually for some figures on what we came up with something called effective utilization of the active asset class, the buses. And we found out that actually there's something called load factor. So there are 3 metrics. I'm going to walk you through this 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 4 kilometers of total travel distance. And then there is effective utilization there is utilization, hourly utilization, which is how many hours per day does the vehicle actually work. And in the industry that we're in, before Sweden, the effective if you multiply all of these factors together, the effective utilization of this asset class was around 8%. So imagine all of the buses around the world are utilized at 8% of their potential, right? So imagine if you can take this swivel now, we're at 17%. So imagine and we're making money. So imagine if you think that 17% to even 15%, right, they fixed the total of all of these utilizations. That's a massive, massive margin. That's an entire evolution to this space. Imagine overnight, you don't need half of the number of buses around the world basically. So it's actually a revolution to the entire bus manufacturing industry. Yes, we as I mentioned, we raised $92,000,000 so far by luckily, we have Beiko, 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. So we've gathered kind of quite a great set of investors we're quite lucky to have. Just I'm going to speed up. COVID then COVID 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. So it was actually quite great for us that it happened. Luckily, I think we've built a culture at Swivel that everyone is a very strong problem solver. So everyone in the business team, everyone can code basically across the company, everyone can code. So that meant that when COVID came, we of course, when a company grows that fast, the company changes every month and you prioritize growth over efficiency. But when COVID hit, that meant that given that we are a highly, highly valuable cost kind of business, we're able to bring our costs to 20% of what you used to build in a matter of a week we can have. Not only that, but go very quickly from the defense mode to the offense mode and how do we actually use this as a massive opportunity. So we've sat down and this was pretty much the only time where we've got like a once in a lifetime chance to work on efficiency. There was no growth to pursue anymore and there was only efficiency at that time. And luckily, as I mentioned, because our team, everyone is a very, very 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 they kept whatever their domain is and you know they can solve for it, right. So we sat down, we structured every 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're not we need to kind of increase the LTV of X by X, so on and so forth. So many kind of problems around 100. And we started creating these cross country spreads, people, 1 person from Egypt, 1 person from Kenya, 1 person from Pakistan, 1 person from Dubai. And these cross country spikes, we started assigning them on a with under single credit owners basically. We started assigning them these sets of problems and they started solving for it. We stayed for 3 months at a very, very minimal burn and now we bounce back. This month, we're at almost 70% of pre COVID levels, then couple of months, 2.5 months. We are growing at 40 percent month to month. So we expect to be fully recovered in the next couple of months. And hopefully, the target I just came back from our yearly summit. Our plan is by end of 2021 is to be the 2nd but the fastest unicorn in the Middle East, inshallah. Yes, we're going basically what happened is we've managed to take a deeper look at our business and break it down into 3 main categories. A category what we call retail, which is purely going for after the normal consumer, the ones I've mentioned so far. But then there is this massive space, which we call transfer as service, which is how do we run Swivel for anyone, for corporates, for schools, but also governments, right? Government that if a country like Egypt basically has 200 buses, has to spends $200,000,000 per year. With our technology, we can bring that to $50,000,000 or to $100,000,000 right? So imagine a 50% or 75% cost saving for the country of what they spend on a line item such as France, right? It's quite a big evolution for that. So 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 this CapEx also, right? So we have the transfer of service and we have the intercity, which is connecting cities together, which we've seen already a 3 3 50% growth from pre COVID levels actually. So now that meant that we had a very strong value proposition across every category and so on. And that meant that our original approach of going to every country, expanding our 3 categories is which was limiting us to emerging markets is not any longer needed, right, because every category in Toronto had a very, very strong value proposition. So 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 Sao Paulo, cities like Nairobi, Cairo, Karachi, so on and so forth. But the transfer to service can be expanded into Latin America, it can be expanded in the U. S, Australia, so on and so forth. And the intercity can be in a continent like Europe, for example, where there's fixed bus, for example, where as big as fixed bus in terms of volumes, much more, much bigger in terms of buses, but they do 10 times more revenue because of the ticket size. In terms of technology, we're very, very well advanced. So there's absolutely no reason why we shouldn't compete. So yes, that's it for me. And thank you for any questions. Fantastic. Thank you so much, Mustafa. And super impressive company, I must say. Bjorn, do you want to kick us off with questions? And if there's any questions from the audience, you know how to do it by now, but you punch them into chat or Q and A, and we'll read them out. Yes. 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, and I'll put it another way, in like 12 months' time, how many markets would you expect to be in compared to today's release? Hello? I don't want to overpromise, but we aim to we're trying to get to a pace where we launch a city per week. That's good. And also maybe if you could elaborate a bit on like what's the key characteristics of the cities you want to enter into? Is it the do they need to be a minimum of certain size? Or what kind of dynamics need to be present before you look at it in a traffic market? Yes, yes, yes. So every category has its own characteristics, right? We have the retail category, which is focusing on emerging markets, megacities, that, let's say, has 10,000,000, 15,000,000 plus citizens. And then there's the transfer of service, which is pretty much applicable everywhere, right? This is cases for corporates, schools and governments. So this is pretty much everywhere this can work. And then there's intercity transport and intercountry transport, which also almost everywhere can work. Very strong in Latin America, very strong in Australia, very strong in Europe, right. So those are the contents that we focus on. As of the next couple of months, we're already actually now we just launched the UAE. We're launching during the next month. We're aiming that by January, we're going to be across the entire Gulf. So we're going to have Qatar, Bahrain, Kuwait, Saudi as well as UAE and Jordan. Those are kind of the Gulf expansion, those within by January, February MAX. And then we're getting the next which we're actually hiring for now is LATAM. So we're launching Mexico City, we're launching Brazil. And hopefully after that, we're looking at Australia and Europe. Those are the 2 countries that we want to get to. Great. We have a question from the audience, which reads like this. Could you elaborate on the technological optimization advantage versus other operators? What differentiates you? So actually, it's many things. It's a good question. So there are 2 main things, right? There's a network you have a massive network, right? Why is this super hard to do, different from, let's say, ride hailing? Is that ride hailing is a very straightforward marketplace, right? You go once you have supply and demand in the same place and you have a 5 minute ETA, 5 minute is kind of the magic number because this is where most the demand sparked, where demand grows exponentially for ride hailing services. As long as you have cars and at the same within a 5 minute distance, you're good to go, right? And you have a very healthy marketplace that can go exponentially. That's what I tell you. For buses, there's a very strong added element, which is the network, right? You have a network in between. Only if you have it out, but at a good working distance, right, at exactly the right time because you have to go to work, right. So you have a commitment, a time commitment. And at the same at a good price, only when you have those three factors, you can take it out, right? You can take a bus going from A to B. And even if it's for free, it's irrelevant client. So if I want to be at work at 10 am, but there's a bus for free and will take me there at 11 am, I will not take it. It's completely irrelevant for me, even if it's for free because it's just I have to be at work at 10 am. So now you have a very complex network, right? You have to, 1, plan this network. How do you have thousands of buses. So this is a very an extremely difficult optimization problem. You want to go you want to basically you're trying between several things. You want to 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 4 trips a day, the bus on Sweden, you want him to start every trip that he end, start the next trip from where he ended, so to minimize all of the inefficiencies in between. And you want him at the same time to end his full ride plan, let's say, when he started, right? Okay. So that's 1. So now let's dig this a bit more. So 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, right? Because it's a cost function, right? If any extra kilometers is an inefficiency. And you have these plans and then you have a set of captains who live in across the city or you're trying to whenever they sign up, you're trying to give exactly the right plan that works for that person that minimizes his from home to work kind of business and from work to home business. Okay, that's 1. Okay. 2, now we have this network design inside the network itself. Every day, there's demand there's certain predictability of demand, but demand there's certain demand patterns. There's a daily seasonality, right? For us, Sunday, for example, is a weekday. So Sunday is the highest day of the week and Thursday is the lowest day of the week, right? So how do you throughout while you can plan very well a fixed route and with a high degree of accuracy, But this the commuter demand not necessarily is the same every day. So how do you maximize the 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. So 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 exceed that baking utilization, the margin is in savings all yours. It's 40% can go up to 40%, 50%. But that means also if you run below the utilization that basic utilization levels, you burn money, right? So how do you so now how do you dynamically while the bus is going from A to B still, how do you dynamically move it across this, let's say, 50 kilometers out to maximize the value. While keeping the customer promise, any customers booking across the south, you're giving them a promise. You're telling them I'm going to show up at 8 and I'm going to drive you at 9 and you're going to get to work at 9. So we're trying to solve this very computationally heavy, very expensive problem, real time across thousands of routes, across emerging markets that are extremely underlined, right? So that's true. 3L, now we have a set of users. Those are price sensitive users, right, because their computers in emerging markets were mostly middle class, right? 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. So that means that pricing is a super difficult problem to solve here. Now you can 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, right? So how can you price every seat in the bus at a different price point to maximize the revenue of the vehicle? So take airlines as an example. How do airlines manage their pricing? It's a function basically, if I book so early, there's an early bird pricing, pricing keeps increasing and then it starts going down. How can I every hour basically know that probability to achieve a certain bus utilization and then every hour run this across the entire network to see what actually bus utilization have achieved And they cannot have a pricing action whether to increase price, reduce price or reduce price because either it can be leaving money on the table or either it can be actually burning money, that's a very fine balance, right, at every hour, at every bus, at every moment across the entire network? So it's a very complex pricing mechanism, right? 4th is the promised bit of it, which is all of that, you're in emerging markets as well, which are extremely unreliable, right? The President can be passing today from A to B and they can shut down the entire city with and you just go and you have to in the end you're promising a customer waiting in the street who you have to show up for. So do you have a certain set of drivers or captains who you have no commitment against them? They can switch over their phone and not show up. How do you manage this very complex operation real time, right? For us, we have the same we have actually more number of us than the Cairo Transport Authority. We have 30,000 employees. For us, the entire company is 500 people, right? And we have more buses than they are, right? And we can run Cairo, for example, with 30, 40 people with the same number of buses, right? That's a Cairo transfer of 30 buses. This is like to walk you through some of the optimization problems that we have to solve more. They're much more, but just for the sake of time, I'll wrap up here. Super. Thank you. And to follow-up on that last part, a bit more basic question from one participant in audience. Could you elaborate a bit more on the supply side, how is the buses, how do you sign supplier activity to the service, etcetera? So it's basically, we never own anything, right? We in these markets, as I mentioned, these buses, this asset class was suffering from 2 main problems. 1 is inefficiency. These women, they're working only twice a day. And for the rest of the day, they just sit around not doing anything, right? It's pretty much empty. And the second thing is seasonality. A lot of them are work or traditionally have worked with very seasonal businesses. They work with either schools, which work 8 months a year, right? Or we work with 2 companies, which works, let's say, 6 months a year. Or we work with corporates, which are a bit more stable. But for them, they just do 2 trips a day. So it's an extremely inefficient operation, right? So now we came to these guys and we said, okay, you used to get GBP 100 per trip from this corporate. I'm not going to pay you £100, I'm going to pay you £60. But instead of you doing to ride the day only, I'm going to let you do 6. So on an aggregate amount, you're making a lot more money with no opportunity cost. On a price per ride, I'm paying less, yes, but on aggregate, you're making a lot more money, right? You're utilizing the asset much, much more. How do I acquire my supply? It's Several channels. So we have these opportunity centers across the city. And in a way, we have these very massive kind of acquisition teams that's going down that go to different governments that go to different parts of town basically that kind of builds that fleet capacity. We have several channels. We have actually many channels. We have a channel which we call the turbidoo, which is basically a very turbo, which is a sales channel where you try to make every bus driver or every actually one in our network a salesperson, they work on commission to get us diverse. We have referral programs. We have our own acquisition teams that go on the street. We go even we do a lot more guerilla kind of approaches where we go to the schools and sign up the buses that they work with or the corporate, etcetera. So we go a bit unorthodox and how do we acquire buses and we build the kind of this massive fleet. So another question here is how long does it take to gather enough data to optimize sufficiently if you're number 1? And does number 2 have any chance to Yes. So actually, the first question is depends on the FITI growth, right? Of course, the better the good thing is that it gets better and better with you can launch with a very first set of data. We use search data, for example, as a starting point. So while people don't know the app, they start searching. We start we already we have our own tools basically that cluster that and tells us what which routes that we should run basically. And we start building as the system kind of as the demand grows and we build more data, it just gets more and more efficient. Does the second mover have a chance? Absolutely not, because we've seen it, for example, with Karim, for every booking that we had to do, Karim, we were burning $1 they were burning 7 dollars And that's because it's a vicious cycle. To get to that level of utilization levels, you're baking you're paying for supply regardless. To get to that level of utilization, I've seen it a problem to solve that nobody has solved before. We're already actually filing for patents for the technologies that we have been so far. So it's an achievement of problem to solve, requires a lot of learning. The pricing technology that we are basically mistaken that what airlines and what scooters across the world have done and we've created it for buses basically for the first time. So that means that for every dollar that we have to spend, any second or even if there's some more person before us who started something that's driven in any country, the limit of efficiency that we operate with is very hard to match. So that means that we can very, very quickly blow any competition away because for every dollar that we need to spend to match the same efficiency, you need to spend $10 So it's super hard for anyone to compete. Thanks. Another question here from audience is, in this expansion that we're looking for over the next year and for how long will it take to do breakeven in a new market and how capital and capital would appear to launch, let's say, in Mexico City? Yes. So the expansion that we're prioritizing is the tax expansion and the intercity expansion. TASK expansion is profitable from day 1 because you work with entities, B2B or B2G entities, who pay you your profit from day 1 with very, very high margins. It's very rare to see a business that can make this margin on $100,000 $1,000,000 On $100,000,000 is the same margin. You're making great margins from day 1 with very, very skeleton teams, right, very small teams and that can operate this business because it's highly automated and just start printing cash NOA. So these are the cash expansions. For the intercity expansions, these are very high margin business, it's quite a bit of investment. But the margin there we're seeing, for example, in the city of Cairo, which is the ticket fare even is less than a lot of markets that we can go to, is taking to 40%, even sometimes gets to 50%. And that margin you can pretty much be profitable on very, very quickly. And let's say you add more buttons, 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 3 of them are massive opportunities, but the retailer is the massive kind of B2C opportunity. This is quite 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. So any future fundraise that we're doing is purely for growth, right? A very minimal of it will be spent in the existing markets. I have a question for Mustafa. Please. Is that okay, guys? Okay. Mustafa, the task is so exciting and so scalable and so high margin and so applicable to corporate and public and private transport. Do you envisage like being at the core at TAS business? And would you ever need to be an operator as well? I mean, I know that being an operator has given you the level, the extreme level of depth and granularity of being able to build out the most efficient task solution. But what's the when do you think I don't need that anymore and I will go out and become a powerhouse? Very good question, Danny. And there are 2 things. 1 is the B2C business is our business where we're building this technology, right? If we could if we didn't build that massive size fleets running across the world, it's impossible to build that technology, right. Like it's very, very hard. You cannot solve this problem. And that's why as I was saying, like we're solving this problem for the first time at that scale and we are actually filing patents on how we're solving it because nobody had that massive lead except governments and governments are not going to be very incentivized to invest in especially in emerging markets that suffer from that to invest in solving this problem to that extent. So that's one. 2 is the beauty of this is that the more you're able to cross utilize your fleet across the 3 categories, the more the fleet becomes profitable. Because now the bus, it's a 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 there are different peaks of demand, right? The demand of travel, for example, is the weekend where there's no commute. It's very supplement it's supplement to each other. The demand for schools is at 7 a. M, while the demand for call centers is at 11 p. M, let's say, right? So how can you the more you're able to bring these pockets of demand, the more you're able to utilize your seat, the more you increase the effective utilization of the vehicle, the more the margins become at the the more you become a lot more efficient and the margins increase like crazy. Fantastic. That's it. Yes, 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 you use Swivel like every day? Or is it 2 times a week or like a leverage ratio? Yes, yes, yes. So we worked pretty much for the week for the committed demand, 22 days a month basically. So they use us an average of 7 times. And that's a great opportunity for us because our North Star is to get them to use us 44 times a month, right? How can we get that? That's all of that is a share of wallet that we were targeting, that we're getting into that. And that's how you get into it by few things. One is building a very strong pricing technology, which is how do you get the right price. I'm a user. We actually traditionally, we look our businesses look at they have this breakdown of users, let's say, high value, mid value, low value. And low value are usually the most subsidized users, let's say. The way we look at it for if a low value user is willing to pay me £10 right, how can I actually you take that £10 because I have a fleet anyway that's running anyway, as long as there's no opportunity cost, it's not taking the place of any other person that buys, it's actually money that's been on the table, right? So how do I price for every user, as I mentioned, and cross it with which bus is going to take and what could 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 is willing to pay, right? So pricing bit of things is very important. And 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 you move everyone from a ride per ride to a month per month, right? Buying what we like a subscription, right? You're buying a $36 a month, right? How do I price it in that package for every user depends on how much you can pay, right? So that's the way we look at it. Super. Thank you very much. I think there's like there's one final sort of what do you call it, not a question, suggestion, which means, Muscatra, please don't sell the company ever. Keep on expanding. I promise you, I promise you, I promise you. We own IPO. We own IPO. We own IPO. We own a brand in Italy. But We're supposed to keep them private as much as long as possible. We're going to be there for his follow ons. Yes. Hey, guys, thank you so much for joining on a Friday from Cairo and Dubai. Fantastic And everyone, thank you for joining and listening in and for the good questions. And it's been this has been fun. And thank you so much, everyone. Thank you so much, guys, for your time. I'm truly honored. Thank you, guys. Take care. Bye.