Wael Fakharany, MD Egypt & SVP for Government Relations, Careem
Wael Fakharany recently woke up one morning and decided to leave what he calls “one of the best jobs I ever had” at Google X to join regional ride hailing startup, Careem. The bold move that baffled many in the community, but made perfect sense to Fakharany, ended a nine-year run at Google that began in 2008 and included stints as regional head of Google in the Middle East and Africa, head of agencies for the Middle East and North Africa as well as regional manager of Google in Egypt and North Africa. Fakharany says it wasn’t a midlife crisis that prompted his decision to leave Google, but rather the dissatisfaction with the view that we as a region were not seen as able to create a multi-bn USD company that could provide services just as good as — if not better than — a global giant. Just six months after he joined Careem as Egypt managing director, the company has closed a USD 500 mn funding round and is now valued at USD 1 bn with plans to IPO within the next two years. With 25 years of experience in tech, Fakharany is a leading figure in the regional IT industry. He’s passionate about the development of young entrepreneurs in the MEA region and the use of technology to solve local problems.
2017 will be the year of speeding up in a slowdown. At the risk of sounding too optimistic, I’m extremely hopeful and excited about the year ahead for us and for Egypt. The reforms that the government has undertaken are painful but necessary. The thing to do now is to just push through without losing momentum. I think the theme of the year for us is going to be expansion, scaling, and taking risks.
The best time to take risks is in a challenging economic environment. We have already launched operations outside the major cities of Cairo and Alexandria. We’re now present in Damanhour, Mansoura, Tanta and Hurghada, and we have very ambitious plans to expand even further in the next two years. Within the next two years, we will be present in every Egyptian city. So I guess you can say we are pretty optimistic and excited about our prospects in Egypt. I think this is the best time to invest.
The Middle East’s latest unicorn. Yes, we have reason to be excited. Our unicorn status along with Souq.com (who were the first) is something that we are very proud of, but the optimism is really about more than just the buzzwords and what Careem has achieved. It’s about the fact that we can see an ecosystem being created in the region, and we can see the rise of local companies that can sort out local problems in a way that simplifies the day-to-day lives of ordinary citizens while simultaneously creating employment opportunities for our youth.
The biggest challenge for the economy will be speed of execution and the ability to adapt to new structures and institutions. The ability to be agile and move across those new structures and policies that we are not yet used to will present a big hurdle for businesses. The quicker we can accept and adapt to these new realities, the better off we will be. Taking too long will result in missed opportunities.
The biggest challenge for the ride-hailing industry is the regulatory framework or the lack thereof. We are building something much bigger than just Careem. I’m very excited about this industry as a whole; it’s growing at tremendous speed and it has multi-stakeholder benefits including financial inclusion and economic empowerment. The biggest challenge for us going forward is that as of yet we don’t have a regulatory framework in place. Right now, we have 450 employees and 45,000 drivers [Careem calls them “captains”]. Having the proper regulatory framework will allow us to have the proper documentation so that we can provide a safer service. We are here to invest in the local market and open avenues of employment for young people while providing safe, affordable, comfortable rides for citizens.
We don’t need a new regulatory framework, we need new executive regulations on the existing traffic law. We are regulated by the Ministry of Interior, they are the legal Godfather of this industry. The new executive regulations will ideally allow the ride-hailing industry to thrive and grow by making it possible to document everything. We have already vocalized our concerns to the Ministry of Interior and they are receptive to our ideas. In February 2016, a ministerial committee was formed to issue a draft law for the ride-hailing industry; we didn’t think this was the right law, so we are still waiting. It’s normal that the regulatory framework lags behind the industry. The telecom law for example was only issued in 2003-2004, long after we began using mobile phones.
Best sector to invest in other than our own? Fintech. Companies that can use technology and innovation to leverage resources that can compete in the marketplace and disrupt industries. In Egypt, we have lots of unutilized assets. I am also personally interested in data analytics. Car leasing is also very interesting because a car is an income-generating asset. Simply having possession of a car allows otherwise unemployed people to go home with money in their pockets every day.
I wouldn’t invest in anything to do with luxury goods right now. I think even in our own households we will be limiting our consumption of luxury goods in 2017.
What business would I start today if I had to start a new business? I would look into a business that makes use of the sharing economy; unutilized and unused assets present countless opportunities, like vacation homes in Sahel, for example, that go unused for 8-10 months of the year. Any business that can make things more efficient, anything that utilizes white space.
What are the low hanging fruit? Where there are challenges, there are opportunities. All of the problems that Egypt currently faces present us with incredible opportunities that can be solved with technology. The fact that you can’t live a single day in Egypt without coming across a challenge means that there are plenty of opportunities. Technology is pervasive enough to solve those problems.
What question will we be asking at the end of next year? I think there will be three questions: My growth percentage, the cost of growth and whether or not this growth is sustainable. I think that by the end of 2017 Careem can be a significant contributor to Egypt’s GDP. The speed with which we already see things changing in our industry is amazing. What is most gratifying is seeing what economic empowerment can do. Seeing someone transform from a desperate grumpy individual to a productive, income-generating member of society is incredible.