BusCaro: reinventing commuting in Pakistan

This interview was conducted, transcribed and edited by Timothy Motte.

Biography:

Maha Shahzad is the CEO and founder of BusCaro, a Pakistani mobility startup. BusCaro is a bus hailing solution for companies, industries and institutions. The company has raised $1.5M in funding.

Previously, Maha was the general manager for Swvl in Pakistan and was the head of partnerships for Careem. 

Swvl and Airlift, two companies with a similar model, failed in Pakistan. Why try again?

The problem both of these companies addressed was real. Pakistanis struggle to find reliable, cheap, safe transportation to get them to work or school. This problem is exacerbated for women, who face terrifying rates of sexual harassment on public transport. The state of public transport in Pakistani cities such as Karachi is dismal and painfully unreliable. 

Airlift, the most funded Pakistani startup at the time ($110M raised), is an unfair comparison. While they started out with the same model as Swvl and BusCaro, they pivoted during the pandemic as commuting activity ground to a halt. They became a quick commerce company, delivering goods through a network of dark stores. Airlift came to a brutal end in mid-2022 when they failed to raise their Series C. 

I wouldn’t say Swvl failed. At the time, the company was on a risky and expensive hyper-growth trajectory, which came crashing when macro conditions flipped. I used to head Swvl Pakistan: we were the company’s number one market in terms of number of bookings. The rise in interest rates, inflation and a sharp decline in investment activity forced Swvl to scale back. But Swvl’s product solved a tangible pain: when Swvl shut down, I got hundreds of messages from disgruntled customers who wondered how they would commute. 

This tsunami of messages convinced me that, while the Swvl adventure was over in Pakistan, the problem remained. That’s why I founded BusCaro, almost immediately after leaving Swvl. My idea was to copy-paste the Swvl model but implement saner unit economics and more sustainable growth tactics, for us to survive while traction built up. 

For example, BusCaro opted for a B2B2C model (employers subsidize their employees’ commute) rather than a B2C one. This reduces our customer acquisition costs (CAC), because we’re going after a couple of big fish rather than individuals. It is also logistically easier: since all users from a similar employer are going to the same place, route optimization smoothes out.

You launched a seemingly failed business model, in a horrible fundraising environment, in an economically struggling market. How did you stitch up the initial traction and raise?