In tech circles and between consumers, the conversation usually centers on ride-hailing and how it has been a hit in Pakistan. But inDrive thinks that in logistics, ride-hailing is not the sole end, but also a means to start launching other services with similar potential to ride-hailing. At inDrive, these are referred to as mobility services and include freight, intercity travel, courier delivery and, of course, ride-hailing.
On March 14, inDrive announced that it had secured a $150 million investment to boost its plans to expand within the mobility market.
In Pakistan, the executive overlooking this segment is Daniil Petin, who joined the company as the vice president of mobility in 2022. Daniil is responsible for driving the growth of the company’s mobility services, which include inDrive.Freight, inDrive. Couriers and inDrive.City to City.
Before joining inDrive, Daniil held several executive positions in global tech companies focusing on strategy, business development, growth management, product development and entrepreneurship.
In conversation with Profit, Daniil outlined inDrive’s plans for Pakistan’s mobility space, and what the country holds for segments other than the frequently discussed ride-hailing service.
What kind of opportunity do you see in Pakistan’s mobility market?
The potential that Pakistan has in terms of mobility – so, in ride-hailing, last-mile courier delivery, freight, and intercity – is huge. And we are not talking only about 2024 and 2025; the potential is long-term – because if you get into the market at an early stage, you havean enormous advantage in the long game.
This is what we are dealing with in the countries where we are very successful, and one of these countries is Pakistan. In some cities, we are ahead of our competitors, and in general, the annual growth of our ride-hailing business is double-digit, around 45-47%.
Mobility is growing even faster. While there is a lot of room in the ride-hailing business, at a certain point you have to compete more, and the available niches in ride-hailing become less feasible. On the other hand, in terms of intercity, courier and freight, we have grown 2-3x year over year. We still have a lot of opportunities in this segment: eCommerce is booming, while ity-to-city trips are new to this market, so we are investing a lot in this
product. This applies to all our products: we have started actively investing in building stronger teams and marketing, as well as in user acquisition.
Another factor to consider is that with improvements in the Pakistan economy, we are expecting that in 2025-26, people will be more willing to spend on eCommerce, which will
consequently boost logistics.
Will ride-hailing always remain the mainstay of inDrive in Pakistan?
If you think of some of the other players – a good example is Uber, which started as a ride-hailing company – at some point, they said, “why don’t we deliver food?”. The eats business now probably has a share similar to ride-hailing at Uber. Grab’s business is essentially larger than their ride-hailing. So nothing is certain in the startup world.
We are investing in these new businesses, but will we remain a ride-hailing-centric company in the long run? We’ll see.
After ride-hailing, which other mobility segment is inDrive focusing on?
I would say it is very region-specific.
In some markets, we are focusing on our intercity service. In other markets, we see a large demand for last-mile courier delivery; for example, in Latin America, we have made very nice progress in some cities in terms of couriers. And with freight, there is 5x growth year-on-year in Pakistan. There is demand and there is supply. All we have to do is match those guys.
What kind of resources is inDrive allocating for Pakistan, and how are you allocating these resources across different mobility segments?
If we see a particular market showing us great results and there is a product-market fit, it will get additional money. It is similar to investing in startups: If some guys are successful and there is a product-market fit, and they are showing good traction and good unit economics, you want to give them money because they are ultimately going to grow and become successful. This is the approach I am trying to implement in the services.
Also, when we know that we need to fix something in the product and there is a product-market fit, we may invest more money. This is an iterative process. While inDrive is a big company now, it is very important to stay fluid and entrepreneurial, to try figure out how we can move faster in terms of product development and experiments.
For example, historically, our courier and delivery service focused only on peer-to-peer segments, where an individual sends a package to another individual. At some point, businesses started coming to the platform. What we are doing now is fine-tuning our app to address the needs of those businesses.
When do you believe a mature product would be out in the market for other segments?
It depends on how you define maturity. At the moment, we are operationally profitable in terms of our mobility businesses. There might be headwinds and there will be experimentation.
It’s in inDrive’s DNA to always try to test and experiment – we never stop. Even in ride-hailing, yes, the markets are pretty mature; but in some markets, we are still iterating and trying new things, like going cashless. We have never been cashless before in the history of the company.
What frictions do you see in building the product in the current economy?
While Pakistan is going through a turbulent time, the growth in 2021-2022 was quite substantial – around 6% year-on-year. That’s tremendous growth. So regardless of these momentary issues, the economy will stabilize and is going to improve.
And I have heard that Pakistan is doing a lot to improve the situation. I see the trend, and we want to be on top of it, which is why we are investing now. This is going to give us results later on.
Is inDrive planning on investing in or acquiring companies in Pakistan?
So far we have done just one deal; we acquired technology for inDrive’s business delivery offering, and it is currently operating in Kazakhstan. This was done in 2023, and gave us the technology to work with enterprise clients there with the potential of global expansion.
inDrive’s team traveled to Pakistan at the beginning of the year to meet the local startup community. There are some companies that we have good synergy with, but no specific plans as yet.
How has inDrive grown their ride-hailing business in Pakistan and what’s the growth like in other verticals?
For Pakistan, our ride-hailing growth last year was 45%, and we are quite positive about 2024. inDrive.Couriers grew at an amazing rate of 2.6x in terms of orders. Our base is low, but there is a lot of growth. Freight grew fivefold from 2022 to 2023 – this is the growth you usually get in some startups in their early stages.
Our intercity service grew faster than our ride-hailing, so we doubled the business in 2023 as compared to 2022. And I would say we have very similar targets for 2024.
Who is inDrive’s biggest competitor in Pakistan’s market, in all verticals?
We don’t have a single biggest competitor. Competition in the market is quite intense, and more and more global players are looking into Pakistan and seeing opportunities here.
This proves our point – that this market is very lucrative.
How does inDrive plan to penetrate the low-tier cities of Pakistan?
It depends. What we’ve seen in other countries is that the trend to use urban mobility services comes to smaller cities, for sure. To begin with, not many people in these cities had heard about digital taxis and using an application to call them; everyone was calling a guy they knew to come and pick them up. Within a few years, it changed. People started to adopt this technology and they realized it was quite useful.
This applied to drivers as well: they started to earn more money, and now it is pretty normal.
Coming back to Pakistan, we need to understand not only the size of cities, but also their economic power. For example, Karachi is home to just 8% of Pakistan’s population, but it forms 20% of Pakistan’s GDP. That is huge. We need to consider that while making decisions about our expansion strategy.
Of course, we like the blue ocean strategy, where you go to less competitive places and are the first one there. We often focus on doing that; that investment will yield a lot.
We go into these cities and keep investing, and then if we see an opportunity, we invest more.
How is the Pakistan market different from other markets?
One of the things we’ve noticed is that Pakistan has a very young population in general.
That means they will adopt the habit of digitalization soon, if not now. For example, currently, there are some drivers who prefer a more traditional way; they may use WhatsApp, but not applications. This is one of the challenges in the Pakistan market –
how do we engage people who are not very familiar with this technology? There are a few markets where we have this issue.
Another thing that stands out in Pakistan is that word of mouth is very powerful. People start telling their friends, colleagues and other merchants that this is a nice service. This means very low-cost organic growth.
But it also requires a specific approach to product and marketing to speak to the audience in their language. A lot of people use English on their smartphones, so for us it is important to create advertisements in both Urdu and English. Sometimes it is better to communicate with the drivers in Urdu, while English works better for communicating with passengers.
How is inDrive going to fund its operations in Pakistan?
Just recently, inDrive secured an additional $150 million from General Catalyst. This is for global investment in product improvements, expanding our service offerings, and entering new markets, and we are very pleased that we achieved this.
