Brazil’s unemployment rate is near its record, but at the headquarters of ride-hailing app 99 it is nowhere in evidence.
The country’s biggest taxi-beckoning tech company is outgrowing its Sao Paulo office after just 17 months as it seeks to quintuple its workforce in 2017 to 1,000 employees. Backed earlier this year by Didi Chuxing, which this week made a major investment in Dubai's Careem, and Softbank, 99 is planning to expand into the rest of Latin America in the near future and is on the hunt for more capital - executives were recently in San Francisco digging around.
Even with a hefty competitor in Uber, the company sees no end in sight to the potential.
"I can’t even predict how big the market in Brazil will be," said 99’s head of legal, policy and communication Matheus Moraes at the company’s Sao Paulo headquarters. "We try to forecast, but we just can’t."
The new additions to the staff will help 99 to grow in a country with poor infrastructure and a meagre public transport backbone. Traffic in the biggest cities is intolerable, with trips sometimes taking five times longer than they should - for example, it can take three hours to get to the international airport, a 30km drive from the financial district.
"Mobility is a problem in Brazil," Mr Moraes said. "In Germany, for example, you don’t need a hailing service, It’s convenient, of course, but not problem solving. Brazil has indeed a problem to solve."
The five-year-old start-up is in "hyper-growth mode" and snagged the Didi investment in January after reaching out for advice. Softbank’s stake followed within months. Both are minority shareholders and Didi holds a board seat.
Currently, 99 has more than 200,000 drivers in 500 cities, and 14 million users in a country with a population of more than 200 million. That compares to - as of a year ago - Uber’s more than 50,000 drivers and 13 million users in Brazil. Over the past three months, 15 million Brazilians have taken an Uber, yet it still operates in just a fraction of the cities where 99 is present, having doubled in the past year to more than 60.
Brazil is Uber’s second-largest market after the US, said Guilherme Telles, general manager for Brazil. (Uber no longer operates in China or Russia, though it does own stakes in companies that do). The competition does not bother him. In fact he thinks it’s a good thing.
"Other players see things we don’t," Mr Telles said.
While Uber is growing in Brazil via its pool service, in large part due to areas such as the periphery of Sao Paulo where getting to public transport can be onerous, 99 is still studying whether to jump into the ride sharing segment. Its person to person car service is among its fastest-growing segments, with top company executives riding at least five times a month. They do not always let on about who they are, although Mr Moraes, if the passenger requests his opinion on the route, will confess since he does not really know his way around Sao Paulo.
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
More on Quran memorisation:
How England have scored their set-piece goals in Russia
Three Penalties
v Panama, Group Stage (Harry Kane)
v Panama, Group Stage (Kane)
v Colombia, Last 16 (Kane)
Four Corners
v Tunisia, Group Stage (Kane, via John Stones header, from Ashley Young corner)
v Tunisia, Group Stage (Kane, via Harry Maguire header, from Kieran Trippier corner)
v Panama, Group Stage (Stones, header, from Trippier corner)
v Sweden, Quarter-Final (Maguire, header, from Young corner)
One Free-Kick
v Panama, Group Stage (Stones, via Jordan Henderson, Kane header, and Raheem Sterling, from Tripper free-kick)
Arabian Gulf Cup FINAL
Al Nasr 2
(Negredo 1, Tozo 50)
Shabab Al Ahli 1
(Jaber 13)
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
