Hi. So, very warm welcome to everyone. Thanks for joining the call. If you're listening to this as a recording, thanks for doing so as well. Hopefully, you're going to get a lot out of the next hour. If you are here with us live, I really look forward to having your questions that are coming through. As you know, this is a rearranged session. We're very happy that Mounir was able to find a new time for us to chat with him and hear about his story. I've been looking forward to it for some time now. For you, if you don't know, Mounir now is the co-founder and CEO of MNT Halan, Egypt's first unicorn and perhaps still its only unicorn. We can ask about that in a bit. I'm hoping to learn a little bit about the sector in Egypt, a place that I've visited many years ago but know very little about. Let's just start with a warm welcome. Mounir, if you'd like to give us a quick intro to yourself and tell us a little bit about MNT Halan for anyone that doesn't know what this company actually does.
So my name is Mounir Nakhla. I'm the founder and CEO of MNT Halan. I started my journey in 2010 selling two-and three-wheelers on credit, and then this grew into providing financial services for micro and small businesses and consumers and individuals. Today we are probably the largest non-bank provider of financial services through technology. So we're a fintech with an app. We're a hybrid model. We've got branches and an application. We're present in four countries: Egypt, Turkey, UAE, and Pakistan. We've served more than 8 million customers. We're a credit-led fintech, so our core business is access to funding. We've dispersed north of $15 billion since inception. We currently have about 2.5 million active customers and a loan book of $1.5 billion.
It's an incredible set of stats that you've shared with us. Let's go back in time. I really want to know how you got to this point. I mean, what you're doing now is absolutely incredible. Where did the journey start?
It depends how far back you want me to go. So it started off when I was at university and I was studying the impact of microfinance, which is what my uncle used to do back in the day. He was in the field of microfinance in a consulting capacity. When I traveled the villages and cities of Egypt, I realized there's a very different Egypt, a very different economy than the one I grew up in, and that was the first inspiration. The next step was founding a tuk-tuk financing business, a light vehicle financing business in 2010. Then we developed a microfinance business in 2014.
Let's stop about that because I like these transitions. It's always interesting to understand from people how to make these transitions. So you've gone to university, studied microfinance. That's a huge step to go and actually start lending money with all the risk.
It took me about eight years of learning the skills of the trade. I got approached by Egypt's largest automotive distributor and they were launching their tuk-tuk business. They were selling about 30,000 a year and they said, 'Mounir, we think if we can introduce credit to this product, we can sell 100,000 a year.' And we did reach 100,000 a few years later.
Were you bought in immediately when they came to you? Did you immediately think, 'Yeah, this is a brilliant idea, we're going to be wanting in,' or did you take a lot of convincing?
My initial gut feeling was yes, let's do it. I wanted to establish a company, to be an equity holder, to have my own thing that I'm driving. I had to assess the viability of the product. I traveled about three hours from Cairo to the largest village where they used to sell tuk-tuks. I stopped a tuk-tuk driver and asked, 'How much did you buy this for and who did you buy it from?' Then I went to the person who sold it and asked, 'How much did you buy this for and how many are you selling?' I went up the whole supply chain and realized there's about 20% margin trading margin in the tuk-tuk, let alone the financing margin. That helped me enormously in my negotiation with my partners because I told them, 'Listen, you guys are importers. I'm going to distribute and finance, and I want a trading margin.' That changed the economics of the whole company dramatically.
Well, you're not worried about people paying the money back? When I think about tuk-tuks, there's a few floating around in South Africa. I think about motorbikes in India, these cheap methods of transport. I come from a banking background, so we're very risk-averse. I think to myself, there's no real collateral, no security. I can imagine handing out money and never seeing anything back, with huge default rates. You obviously saw something different.
Yes. The tuk-tuk in Egypt was operating as a revenue-generating business. It was more of a taxi than for personal use, commercial use. The payback on the tuk-tuk was about eight months if you pay it in installments. It made a lot of economic sense, and that gave me comfort to lend. And it's also asset-backed; there's an actual vehicle worth $2,000.
Yeah, if you can find it. But you've entered the market. You had to find partners to back you. Was it like, we're going in big, finance 100,000 tuk-tuks with significant financing? Or was it let's run a couple of prototypes, start with the first 10 or 20, then scale up?
We seeded the company for about $2 million at the time in 2010. That for me was a lot of money. We then leveraged, and that was a big mindset change. I went to a bank. The business was going well. We launched in late December 2009, sold the first 64 tuk-tuks in March 2010. By June, I was signing a loan agreement with the first bank for another $2 million, provided we increase the capital a bit. That was a game-changer because it was my first introduction to leverage. I said, 'First, I'm making money with my own money, but then I'm making money on other people's money.' That was brilliant.
That was obviously a banker's money. The story could have ended there, couldn't it? You could have ended up scaling and being very successful, maybe taking the model to other countries. But this wasn't enough to keep you interested. When was the next pivot or augmentation?
This journey kept on going. I said, 'Okay, now we've got a distribution network. We have 200, 400 locations. Let's add motorcycles, cargo tricycles, refrigerators.' I just kept adding products. We were selling while paying value-added tax because there were no licenses for private companies to lend money. The law changed in late 2014. Earlier in 2014, the government had banned the importation of tuk-tuks for three months, which was very tough on me and the company. But when the lending license came out in late 2014, I rushed to establish a microfinance company. That was a big turning point because we started doing a very different product: group loans for women, and then business lending.
When did you start to think about ride sharing?
In 2017, I get a call from one of my shareholders. He told me, 'Mounir, you've done this fantastic company. You're big into vehicle financing, so you have a stronghold on owners of motorcycles, three-wheelers, and cargo tricycles. I would like to encourage you to come to Indonesia and meet the founder of Gojek.' I spent a whole day with the founder of Gojek. At the time, Gojek was a billion-dollar company doing ride-hailing and delivery, established in 2015. We were around for seven years, transacting at about $150-160 million valuation. I asked, 'Why are they so much more valuable than we are?' The bottom line was technology. VCs were flooding money, interest rates were getting less, and there was a lot of investment in technology. I said, 'Okay, I can do ride-hailing. I can get as many drivers as I need. I need an application and marketing.' That's when I started looking for a partner and found Ahmed Mosaad, who co-founded Halan with me. Halan started as a ride-hailing company. By 2019, we were doing about 3 million rides a month. We introduced e-commerce and our own closed-loop wallet. We were still learning, but we were burning $1 million a month. A million dollars a month was hard to digest. In summer 2019, I was raising a $15 million round and thought, 'What am I doing? I'm raising $15 million that I'm going to burn through in less than 12 months, and then I'll be out raising again.' That was a big turning point. The VC world wasn't talking about unit economics or path to profitability; it was all about growth. I went to Ahmed and said, 'Something's wrong with this ride-hailing business. If we increase prices, rides go down. If we reduce driver incentives, drivers stop working. I see drivers doing rides with family members just to meet incentive targets.' He asked what I suggested. I told him, 'I've got the lending business. Lending won't scale without the right technology. Our systems are breaking down. If we put all our energy into financial services, it's going to be a game-changer.' Ahmed's buy-in was incredibly important. I then had to approach two sets of shareholders: one focused on profitability and a solid finance company, and the VCs and tech shareholders. The VCs said, 'Why do you want to partner with these guys? We're going to disrupt them. You'll do ride-hailing and then financial services.' The other side said, 'Why do we want to buy a loss-making company with 70-90 engineers and a big brand name?' The only way forward was to raise fresh equity and buy out those who didn't like my vision. This was happening in Q4 2019, and COVID hit in early 2020. I had to practice patience and meditation. Even with COVID, the loan book was deteriorating. We managed to close the round in 2021, raising $120 million, mostly for secondary transactions to buy off shareholders who didn't want to combine. Since then, it's been an incredible ride. We built proprietary core banking software, Neuron, on microservices. We added an open-loop wallet, grew e-commerce, and introduced savings and investment products.
You make it sound so easy. Let's unpack a few things. I'm interested in the point where you decided Ahmed was the person to co-found this pivot. Finding a good partner can be the death knell for many. Others say they don't want a co-founder, they want to employ or outsource. You went through a definite decision process to work with someone as equals. Why was that, and how did you find Ahmed?
Ahmed was recommended by a friend and top VCs. I knew he complemented my skill set with little overlap. We're very different in how we operate. He has a cool demeanor, good sense of humor, great social skills, and is a math and tech whiz. There was chemistry. It took a while to convince him. He started building through his company at arm's length, then I suggested an acqui-hire and equity. He was skeptical that the masses in Egypt were tech savvy enough for ride-hailing. I assured him there's a whole other Egypt of 110 million, and it was an eye-opener. That gave me credibility.
You may have been loss-making, but that's normal for most companies. Uber was loss-making for many years. The story was about growth. How did you proceed with getting drivers and clients in Cairo?
I'll address the loss-making first. Uber and Amazon were born in the US with abundant funding and different VC stages. In our side of the world, it's easy to raise $10-15 million, but try raising $100 million for a loss-making business. It gets challenging. That's what I saw coming. Once interest rates increased, money dried up. Many startups went bust. I'm glad we did what we did when we did. Regarding acquisition, we had a huge database of drivers from selling motorcycles and three-wheelers. We tapped into that and used our distribution across Egypt's 26 governorates. We also had an online form. There was an inspection to ensure the vehicle was in good shape.
While you're talking about investment, has the landscape changed? I've chatted with investors. There's been a retraction for funding in Africa, with demand going to the US and AI. There seems less interest in Africa. Do you think it's getting better?
We've been consistent with fundraising. We raised in 2018, 2021, 2023, 2024. The last round was over $100 million to acquire a Turkish business. We've cumulatively raised $400-500 million. The narrative is we're a tech company with strong focus on technology, growth, and profitability in dollar terms. The problem with Africa is currency devaluation. Even if you perform well in local currency, steep devaluation hurts investors. Our business adjusts quickly because the average loan size is dollar-denominated or linked to inflation. We've consistently grown in dollar terms.
Let's go back to the other question: how did you get riders to learn about you, sign up, and trust you?
We had a huge database of drivers because we were selling tens of thousands of motorcycles and three-wheelers. We first tapped into that and used our distribution and contacts across Egypt. We also had an online form where you could download the app and join. There was an inspection to ensure the vehicle was in good shape.
It seems you're very studied. The story where you drove three hours to meet people and talk—you seem to do a lot of research.
I ask a lot of questions. I'm curious and like to get to the bottom of things. As a child, the word at the tip of my tongue was 'why'. I'd just keep asking why to go through the layers.
Was it stressful in 2019 with the $1 million monthly loss? That would be incredibly stressful for me.
It was incredibly stressful. In 2018, I sold some shares and made a bit of money. You'd think I'd be partying, but I was stressed. It took me until summer 2021 to breathe again. Those two years, plus the three months in 2014 when tuk-tuk imports were banned, were the most difficult periods.
How do you get through it? People don't talk enough about stress and courage. I've never met a successful person without difficult moments.
A big part is knowing that good times don't last and bad times don't last. We navigate our own journey. If you know there will be sunshine after the rain, you wake up, put cold water on your face, and push forward. Also, try to have a good time, experience joy, social warmth, and time alone. I practice Tai Chi, go to the gym, and play paddle.
So a mixture of physical and mental activity, and the people around you. You can't do this alone. How many people are in the company now?
Thousands. The tech team alone is about 120-150. We have field agents, but the head office is about 1,500. Turkey has 1,000 people.
You've reached the point where you probably don't know every staff member. How did you find that journey? Did you have to reinvent yourself as a CEO?
I had to reinvent myself. It comes with aging. The 30-year-old is not like the 40-something. One has to readjust. I used to be a branch manager, reviewing credit cases one by one. Then I became area manager, COO, CEO. I learned on the job.
Did you ever worry your entrepreneurial skills wouldn't transition to being CEO of a large corporate?
