Generation Start-up: Egypt’s Halan is a ride-hailing app for underserved populations

The Arab world’s most populous country is home to more than 100 million people, and a small - but disruptive - transport fleet by comparison: 1.5 million motorcycles and 700,000 tuk-tuks that contribute to some of the worst traffic congestion in the world.

That’s where Halan, an app connecting motorcycles and tuk-tuks to Egypt’s underserved communities, comes in.

“It just made a lot of sense to organise a scene that’s so unorganised,” says Mounir Nakhla, Halan’s founder and chief executive. “The problem we were really out to solve was to provide fast, efficient and safe transportation to underserved communities around Egypt.”

The small vehicles are able to navigate narrow bumpy roads and go to the areas where they are needed most.

“We’re penetrating the regions of Egypt where 80 to 90 per cent of the population resides,” Mr Nakhla says.

Halan, Arabic for "immediately", not only helps the underserved population get around, it does so at a much lower cost. A Halan ride is around 17 per cent the cost of a Careem or an Uber car ride in Egypt, and around 30 per cent the cost of a Careem Bus or Swvl bus ride, according to Mr Nakhla.

Halan has had nearly 1.8 million downloads and provided close to 20 million rides since its start in November 2017. Just between the last three months of 2018 and the first quarter of this year, the company tripled its number of trips.

With investors that include Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures and Oscar Salazar, a co-founder and former chief technology officer of Uber, Halan has raised almost US$8 million (Dh29.3m).

Now the plan is to expand both geographically into other cities in Africa and the Middle East, and vertically into other services. Mr Nakhla says his hope is that the ride-hailing service becomes the region's “super app”.

In Egypt, Halan covers Cairo and Alexandria as well as cities in the Nile Delta region and Upper Egypt. It expanded to Sudan’s capital Khartoum and its second-largest city Omdurman last year. It offers food delivery and is adding on last-mile logistics services for businesses.

“Launching [operations in other] countries is important, but launching [business] verticals is equally important - if not more important,” he says. “Now that we’re doing millions of rides a month and we’ve got north of 100,000 users, we’re launching new services to these customers.”

The inspiration for Halan came from Go-Jek, a transport and logistics start-up founded in 2010 in Indonesia. Go-Jek comes from the term “Ojek”, meaning "motorbike taxi" in Indonesian, its first line of business. The company has since added two dozen app-based services, from Go-Car ride-hailing to Go-Pay e-wallet, and was recently valued at $10 billion by New York-based market intelligence firm CB Insights.

In early 2017, Mr Nakhla was approached by David Halpert, founder of Battery Road, one of Go-Jek’s seed investors. Mr Nakhla was already well connected in the transportation and mobility sector, having co-founded Mashroey, a light-transport financing business, and Tasaheel, a micro-financing business. Mr Halpert was able to get Mr Nakhla an appointment with Nadiem Makarim, Go-Jek’s founder and chief executive.

“On the plane on the way back I made the decision to found Halan,” Mr Nakhla says. “The growth possibilities with technology were just eye-opening.”

Battery Road gave Halan its first cheque in the start-up’s seed funding round, which raised $525,000. When Mr Nakhla founded Halan with tech entrepreneur Ahmed Mohsen serving as the chief technology officer, it began with a few hundred trips a day.

“By March [2018] we were doing thousands of drives a day,” says Mr Nakhla. “At that point I realised that we’ve got to up our game a bit.”

Halan grew its executive team with seasoned transport pros, hiring Mohamed Aboulnaga, a former regional director at Careem, as co-founder and chief commercial officer. Dina Ghabbour, previously with Ghabbour Auto, joined as chief marketing officer.

By the end of last year, Halan had raised $4.4m in its series A round led by Battery Road and Algebra Ventures, and joined by existing strategic shareholders and individual investors, including Mr Salazar. Now the company is in the midst of its series B round, which, so far, has raised $3m.

“While everybody is fighting to bring ride-hailing to one billion people in the world, Halan is focusing on the remaining six billion,” said Mr Salazar in December when he joined the company’s board.

Karim Hussein, managing partner at Algebra Ventures and fellow board member, tells The National: "Halan is well on its way to being the region's first 'super-app', solving critical needs in low-income, underserved and untapped markets."

Tuk-tuks are banned on Cairo's busy main streets, but Halan is concentrating on the vast population outside of the city centre. “These [main street] places only inhabit 5 per cent of Cairo’s population. Greater Cairo’s population is 20 million people,” says Mr Nakhla.

Halan’s largest client base is the “people who live in villages and informal neighbourhoods who are not typically targeted by technology and start-up companies,” says Mr Nakhla.

Egypt’s rural and low-income population has increasingly adopted technology and social media, Arabising it with colloquial terms like “el Face” for Facebook and “el whats” for WhatsApp. The Halan app is only available in Arabic due to its target audience.

Similar to Uber, Halan does not have its own drivers, but screens and trains the drivers it uses. The app informs customers who the driver is and the cost of the trip before starting the ride. For the customer, Halan provides convenience and safety, while for the driver it offers incremental business.

“We really have two clients: the driver is our client and the customer is our client. We need to make both happy and add value to both,” Mr Nakhla says.

Halan now seeks to capitalise on its large network of drivers through added services. In addition to motorcycles and tuk-tuks, its vehicles include cargo tricycles to deliver goods. The app also offers delivery from fast-food restaurants such as KFC and McDonald's and is also focusing on signing up small restaurants across Egypt "within the communities where we operate the most”, says Mr Nakhla.

For the geographic expansion of the company, Mr Nakhla says it is important that a target country ticks all the right boxes: a large population; good internet and high mobile penetration; and a large fleet of light transport vehicles.

“Getting all three at 100 per cent is not always [possible], but you get two out of the three, two and a half out of the three. So we have a whole list of where we’re going next,” he says.

There's competition on the horizon for Mr Nakhla. Careem piloted tuk-tuks in Cairo from December last year until May, although it has not confirmed whether it will go ahead with the service. Careem Bus operates in Cairo and Alexandria. Egyptian bus transportation app Swvl just raised $42m to expand to other African countries, including Nigeria. But Mr Nakhla is not worried.

“The founders have done a fantastic job, [but] Swvl is no competition whatsoever to us. We address a different customer segment and we provide a different set of solutions in a different way,” he says. “If anything, we complement one another.”

Q&A: Mounir Nakhla, founder and chief executive of Halan

What is Halan's competitive advantage?

Halan's technology and its key skill set, together with the network [the management team] ... and their understanding of the needs of underserved communities put the company in a unique position to disrupt the market.

What already successful start-up do you wish you had started?

I’ve been very entrepreneurial all my life and I’ve always taken a jab on the start-ups I wanted to create and I’ve been lucky with the ones I’ve established so far. However, if there is one start-up that inspires me a lot and that I admire a lot, it would most definitely be Amazon.

What new skills have you learnt in the process of launching your start-up?

Managing very fast growth has been challenging. I’ve had to be more creative, act swiftly, rely more and more on a qualified team, and not micromanage.

What is your next big dream to make happen?

It’s really to be the application of choice for all underserved communities in Africa and the Middle East.