Careem invests $50 million in super app
Careem announced the launch of its super app, combining all of its services like ride-hailing and food delivery onto one platform. The Uber subsidiary has so far invested $50 million to develop its super app which centres on three main pillars – the mobility of people (cars, bike, rickshaw), products (food, e-grocery, delivery) and money (bill payment, mobile recharge, peer-to-peer transer).
Having suffered an 80 per cent decline in revenues during the coronavirus lockdown which resulted in Careem laying off 31 per cent of its staff, the company is pinning its future on this super app strategy.
“We’ve invested $50 million in this super app and more will be invested over time. It will make the unit economics for Careem a lot more efficient,” said Mudassir Sheikha, co-founder and chief executive officer at Careem. “We will be improving the engagement of our users by offering them multiple services on the super app and retention rates will go up and we expect that to help our bottom line. We believe this will help us emerge as a more sustainable platform.”
Underpinning the movement of the three main pillars is its Careem PAY, a closed-loop peer-to-peer mobile wallet. This digital wallet will allow its customers to pay for all the goods and services available on its super app. This is what Careem, which is now present in 100 cities with 33 million users and 1.7 million drivers or “captains”, believes will create an ecosystem to drive digital transformation.
“Only 2-3 per cent of spending is currently going through digital platforms, in China or Europe or US, this is easily 20-40 per cent and hundreds of billions of dollars that go through digital platforms,” said Sheikha. “We are in the process of enabling this migration through online commerce.”
The company is offering offline retailers the ability to sell their goods on the super app and deliver them to customers via Careem’s captains whether on bike, car or delivery vans.
“You can shop from your favourite pharmacy, bakery and supermarket and you can order things from those spaces on the supper app. As soon as you order, one of our captains will be at your doorstep and captains will be able to deliver goods or people,” says Sheikha.
Allowing its captains to move both goods and people will allow them to “earn more money” and eventually offer customers a better price as a result of higher utilisation of its drivers.
“We see many tech companies start in one place and expand to many others. Amazon started by selling books and they do many more things, but they still sell books. For us, transportation, ride-hailing is at the core of who we are, but from that base we are going to offer more and more services to make it easy for people to lead their lives more holistically and focus on things that matter,” said Sheikha.