Presto: Libya’s Most Successful Tech Startup October 2nd, 2024
Via Rest of World, a report on Presto, the Libyan delivery app now planning to expand to neighboring countries:
Presto is now the second-largest delivery company in North Africa, after Glovo.
The company navigated the unique challenges of Libya’s security situation and government-dominated workforce.
In September, Ammar Hmid, the founder and CEO of Presto, celebrated a new milestone for his delivery company in Libya: The startup had surpassed 23,000 orders in a single day.
“No one in the country thought that these numbers were possible,” Hmid told Rest of World. “When I first started, my dad told me, ‘You will not be able to make a thousand orders per day.’ Now he’s told me this is beyond his wildest dreams. I’m proud that we have managed to create a culture of gig economy in this country.”
Presto is now the second-largest delivery app in North Africa, after Glovo, a Spanish company that operates in Morocco and Tunisia.
For Hmid, Presto’s success comes after years of waiting for the right moment.
In 2017, he returned to his hometown of Tripoli, Libya’s capital, after studying management strategy in the U.K. He wanted to replicate the startup ideas he had seen abroad. But Libya was embroiled in civil war and prolonged political and economic uncertainty. The climate wasn’t friendly to entrepreneurship, and Hmid put his ideas on hold.
In 2020, the political situation stabilized. It was the Covid-19 pandemic, too, and Hmid finally saw an opportunity for an app that offered on-demand delivery from restaurants, supermarkets, and pharmacies. Today, Presto is the largest startup in Libya by number of users and employees. It has registered more than 2,000 merchants and 24,000 delivery drivers. Its app has been downloaded about a million times. According to industry experts, gig workers, merchants, and shoppers who spoke to Rest of World, Presto has redefined online delivery in Libya.
“No one in the country thought that these numbers were possible.”
“The system was very primitive before,” Amin Salih, chairperson of the Libyan Technology Foundation, a nonprofit focused on technological development in the country, told Rest of World. “There were no motorcycles, delivery vehicles, or delivery services except on a very small, personal scale. Egypt was 20 years ahead in terms of ordering through hotlines. People see Presto as a global company like Uber, Careem, and Talabat, and want to be part of it.”
Merchants in the Tripoli area told Rest of World the company’s large network of delivery drivers who are available around the clock has boosted their sales. “Presto increased the demand for the meals and food we provide by about 25%,” said Abdo Sharkas, owner of Capo Café in Tripoli’s Abu Salim neighborhood.
Presto has adapted well to the needs of Libyan consumers. A case in point is their payment system. While the app allows for digital payments, cash transactions are far more widespread in Libya due to historic instability in the banking system. Presto has built exchange points across cities where delivery drivers remit the cash they collect.
Presto wasn’t easy for Hmid to launch. He has said in previous interviews that he struggled to raise funding from institutional investors, and that his emails to venture capitalists went mostly unreturned. He solicited initial funding of $3 million from friends — making Presto the most-funded tech startup in Libya. The company has not raised subsequent funding.
The hurdle for investors is that Libya lacks a technology ecosystem, according to Karima el Hakim, the Africa co-chair at MENA Fintech Association, a nonprofit working in the Middle East and North Africa. “The country is not a beacon for innovation and youth development in technology talent,” she told Rest of World.
Hmid does not have a technical background, so he first outsourced the engineering. He searched within Libya, without success, then contracted an Indian firm to help with the initial development of the app. Eventually, he built a local team of developers by hiring graduates from universities in Libya as well as mid-level engineers.
“In the first year, each time we reached a number of orders or a certain amount of traffic in the app, the app crashed,” Hmid said. “We now have more than 20 in-house engineers, including those who started their careers with us, and some senior engineers who have built systems for the central bank and the government.”
To deal with an unstable banking system, Presto included a cash payment option and created cash exchange points for delivery drivers.
One of Presto’s early challenges was recruiting enough delivery drivers, due to Libya’s unique conventions around work. The country’s public utilities, including electricity, water, health care, and fuel, are subsidized, contributing to a low cost of living. In addition, the majority of Libya’s working population — almost 85% — is employed in the public sector. Many of these government jobs run for just half a day, from 9 a.m. to 1 p.m. Most Presto employees are also active government workers, Hmid said.
It was initially difficult for Hmid to find drivers who wanted to deliver for Presto full time. “For the Libyan market, Presto needs to have more drivers,” he said, pointing out that Glovo is able to deliver far more orders per day in neighboring countries with fewer drivers. Glovo has 12,000 registered couriers across six African countries, compared to Presto’s 24,000 drivers in Libya alone.
Fifteen out of 20 Presto drivers who spoke to Rest of World hold a government job in addition to driving for Presto part time. Presto, however, makes up the majority of their earnings.
“I’m an employee in the government hospital in the morning. I deliver orders for Presto from 6 p.m. to 2 a.m. daily. I spend 48 hours a week for six days, including Friday, delivering for Presto,” Riyad Ibrahim Zayeed, a 32-year-old Presto driver, told Rest of World. Zayeed has worked for Presto for two years and makes more than 3,000 Libyan dinar ($632) monthly — over triple the country’s minimum wage of 1,000 dinar.
Ali Ahmed, a driver who started at Presto 10 months ago, delivers food and groceries from 9 a.m. to 5 p.m., then works a security job as a side gig in the evening. Ahmed told Rest of World he earns up to 2,240 Libyan dinar ($470) every month from his delivery gig alone.
Other drivers who work for Presto full time told Rest of World they were students or recent graduates who couldn’t find employment with the government. According to UNICEF, the youth unemployment rate in Libya is 51.4%, one of the highest in the world.
It’s difficult to break even in the delivery sector. Several leading European and American food delivery companies — Deliveroo, Just Eat Takeaway, Delivery Hero, and DoorDash — have racked up more than $20 billion in combined operating losses since 2020, according to a May 2024 report in the Financial Times. Zomato, India’s biggest food delivery company, only became profitable last year, after 15 years of operation.
Four years in, Presto continues to build a profitable business. According to Hmid and financial documents seen by Rest of World, the company is on track to hit over $1 million in net profit this year. “What we do in one day is what our closest competitor does in a very, very good month,” Hmid said, referring to the rival delivery service Otlobly.
Presto currently operates in four Libyan cities: Tripoli, Benghazi, Misrata, and Zliten. Hmid believes that his company’s adaptability might be enough to win the entire North African region. He plans to expand into neighboring countries including Tunisia, Morocco, and Mauritania.
“We are planning to expand to Tunisia by the beginning of the next year and also Morocco by the end of next year,” Hmid said. “We are comfortable that by 2026, our [gross merchandise value] will be higher than Glovo in the North African region.”
This entry was posted on Wednesday, October 2nd, 2024 at 9:42 am and is filed under Libya. You can follow any responses to this entry through the RSS 2.0 feed.
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