| 19 February, 2018

Saudi start-up looks to turn cars into mobile billboards

Shiftah gains funding from Saudi Aramco's venture capital arm to help fund its roll-out

Image used for illustrative purpose. Cars stuck in heavy traffic are seen in central Riyadh March 31, 2012.

Image used for illustrative purpose. Cars stuck in heavy traffic are seen in central Riyadh March 31, 2012.

REUTERS/Fahad Shadeed

Three young Saudi entrepreneurs have gained funding for a new business that aims to link brand owners with young drivers who are willing to turn their cars into mobile advertisements.

Salem Aljawini, Ahmed Aloraifi and Muath Altukhaifi have gained funding for their Riyadh-based firm Shiftah from Wa'ed Ventures, the venture capital firm owned by Saudi Aramco.

Aljawini, 29, said that he could not reveal how much had been invested into the business, but that the proceeds would be used to improve its technology and to hire more staff as it moves from development stage to roll-out.

Although the company is only planning a formal launch next month, it has already carried out its first campaign in Riyadh for Saudi perfume company Al Dakheel, and is currently planning three more.

"We're signing with companies in retail, insurance and F&B [food and beverage]. Two of them are huge," he said in a telephone interview with Zawya earlier this month.

Aljawini said he had initially felt that its business model for advertisers would have been more suited to small and medium-sized enterprises (SMEs) as they can control exactly how much they spend, and because the costs are about 50 percent cheaper than an outdoor campaign using static billboards, although he added it was difficult to give precise cost figures because a campaign's value would depend on several factors such as the number of cars, the numbers of hours driven, the length of the campaign and the area of the city covered.

He said that the minimum length of campaign would be two weeks using at least 10 cars, but that this could be scaled up to a two-month campaign involving up to 250-300 drivers. Drivers earn anything from 1,500-3,000 riyals per month ($400-$800), he added.

"But we were quite surprised that the big companies were coming to us before (we were) going to the public. I think they view us, and we view ourselves, not as a replacement for the outdoor ads, billboards or those screens on buildings. We are a new addition to this space."

Advertisers tailor campaigns through Shiftah's platform, Aljawini said, with drivers paid to cover a certain number of kilometres per day in a given area. Driver movements are tracked via mobile phone apps, Aljawini added, and once a daily limit is reached no further charges are incurred.

He and his co-founders met while doing an internship at PwC in 2010-11 but it was only when Aljawini returned from studying for an MBA in Spain in 2016 that the Shiftah concept began to be pursued.

"We bootstrapped the project," Aljawini said. "We changed the business model a couple of times. They had their jobs, I had another start-up I was working on, but we used to meet on a weekly basis. After forming the clear business plan, we funded it heavily," he said, estimating that bringing the app to functionality stage cost them "more than $50,000".

Driver doubts

He said that they had doubts about whether car-obsessed Saudi youth could be convinced to turn their vehicles into mobile advertisements, but despite the fact that it has so far only run a social media campaign bringing people to a landing page on its site, more than 3,000 drivers have expressed an interest.

"Almost everyone owns a car in Saudi Arabia, and with the women being allowed to drive in Saudi within the next couple of months we'll be delighted to have some of them to join Shiftah as well," he said.

"The main advantage of us compared to other shared economy applications is that we're not requiring them to do any extra work. They're just going through the daily commute and they're earning money while doing that," he said.

The Shiftah team has signed an agreement to go through the Badir incubator based at King Abdullah City for Science and Technology in Riyadh, and Aljawini said that it plans to roll-out to Jeddah and other cities, before targeting other countries in the region later this year.

Khalil Al-Shafei, CEO and managing director of Wa’ed Ventures, said in a press release announcing its funding that Shiftah "provides an opportunity for the youth to generate additional income" while lowering advertising budgets for SMEs.

Philip Bahoshy, the founder of United Arab Emirates-based venture capital platform Magnitt, said the venture capital ecosystem in Saudi Arabia is growing. Although its 2017 State of Mena Funding report published last month reported that the number of deals done in Saudi Arabia as a percentage of the overall regional total fell by 3 percent last year, both the number and value of deals completed increased in absolute terms.

Bahoshy said there were 18 deals done in Saudi last year, compared with 16 the year before. The value of deals done jumped to $37 million - up from $13 million a year earlier. However, $20 million of this was taken up by one deal - a Series B funding round by Wa'ed Ventures for Paytabs.

"I think in general, you're seeing an increase in the amount of funding that's going into the kingdom, but you're also seeing a lot of government initiatives to foster and encourage investment," Bahoshy said.

(Reporting by Michael Fahy; Editing by Shane McGinley)


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