Dawi Clinics operating at 15% of capacity, with significant room for growth
STARTUP WATCH- Can a healthcare startup in Egypt manage to scale up and not lose its way? Our good friend Magda Habib seems to think so, and she believes her startup Dawi can do it. In an interview with the Financial Times, she says that the primary healthcare clinic chain Dawi Clinics is currently operating at about 15% of capacity, and has significant room for growth. Although not yet turning a profit, Dawi recently turned down a takeover offer from an undisclosed party, feeling the offer to exit was too early and that the buyer was not the right fit. Dawi secured instead a USD 3 mn investment from the Egyptian American Enterprise Fund last November.
The key is in waiting it out: Dawi’s focus on providing an ethical, affordable service puts pressure on revenue, but Habib believes that the long-term investment in patient trust will ultimately put the company in a stronger position for growth. “We’re trying to make the branches profitable, but this is a business based on volume, so I need 10-15 busy branches to start making a profit. We want branches to start to be profitable by the end of next year,” Habib said. She believes Dawi is an eminently scalable business, and says that it is her dream to have 100 branches one day, although the current plan is to set up between 25 and 30. With seven branches in Cairo currently, the intention is to expand outside of the capital, and open at least one branch in the Nile Delta next year.
Magda Habib’s interview is part of a Financial Times series on startups in the Middle East. You can access the full series of FT Future 25: Middle East here.
Careem’s application of tech infrastructure to create regional solutions led to its USD 3.1 bn acquisition by Uber, a second piece in the Financial Times series says. This challenge posed by Careem to its US-based rival has led to the region’s largest tech buyout, due to close in January, which will see Careem become an Uber subsidiary while continuing to operate under its own brand. Careem will continue to be led by co-founder and CEO Mudassir Sheikha,who intends for it to become a one-stop shop for diverse services, pursuing a growing customer base as it continues regional expansion, and moving into mass transportation and deliveries.
The idea is to continue following Uber’s original model, while maintaining its track record of localizing more effectively. In addition to launching its bus service in Egypt, the company has set up a Jeddah-Mecca route in Saudi Arabia for Hajj pilgrims, is diversifying beyond ride-hailing with the acquisition of a bike sharing company in Abu Dhabi this year, and an entry in the food delivery space. Careem also intends to add groceries and pharmaceutical products to the goods it delivers towards the end of this year and in early 2020.
The series continues with a look at how to avoid the mistakes of investing in MENA startups. Trying to apply Silicon Valley investment techniques in MENA is a mistake, writes entrepreneur and investor Sabah Al Binali. The region is not homogenous, and communication is often less direct than in the west, while regulatory structures are more complicated and investment returns often won’t come quickly. Building a successful startup means investing in regional expertise, he says.
Among the other stories in the FT series: