Necessity is the mother of all inventions, according to Greek philosopher Plato. The saying holds true for Saudi Arabian entrepreneurs Abdullah Bin Shamlan and Ameen Mahfouz, the founders of Speero, a Riyadh-based online car parts seller.
“I had an issue with getting my own car repaired … the service facility didn’t want to buy the auto parts themselves and I had to waste a lot of time convincing a third-party seller to deliver the parts at their doorstep,” Mr Shamlan, 31, said.
“That was when I realised this industry needed an on-demand solution to source automobile parts. Combining my experience in operations, marketing and business development with Ameen’s technical skills felt just right and we started Speero.”
Mr Shamlan and Mr Mahfouz, who met through mutual friends, established the company in July 2017 with third founder Abdulaziz Alashram, who was also an early investor but moved to another job after two years. He still owns a stake in the company.
“As an entrepreneur, having the right co-founders in your journey is really important ... I must say that I have been fortunate,” said Mr Shamlan, who worked with a number of start-ups building online marketplaces between 2012 and 2017 and was an early employee of more than three companies.
Speero ships to over 90 cities in the kingdom and has logistics offices in Jeddah and Dammam.
The company allows users to buy new and used automotive spare parts through its website and mobile app that bring price transparency to the market. Customers submit information about the parts they want through the platform and various sellers then provide price quotations, allowing the customer to select the cheapest option that is then delivered to them within 24 hours.
For spare parts businesses and repair shops, the platform is an enabler that allows them to scale up their reach. Through its software-as-a-service (SaaS) solutions, Speero provides businesses with data analytics and insights that help enhance user experience, while also understanding demand and other trends.
Saudi Arabia’s automotive aftermarket and the spare parts and service industry is projected to increase 6 per cent annually to $10.2 billion over the next two years from 2018, according to Automechanika - the world's biggest trade fair for the automobile aftermarket.
“Entrepreneurship is something that appealed to us and we were willing to take the risk to solve a challenge faced not only by us but by millions in Saudi Arabia … we just dived into it and never looked back … results are very satisfying,” said 35-year-old Mr Mahfouz.
“We aim to become a one-stop shop for all vehicle needs and ensure the seamless functioning of the supply chain.”
The company was started with a simple app and, initially, relied on WhatsApp to run operations under the brand name Autotash. As the business grew, it was rebranded to Speero.
The kingdom’s car parts market for commercial and passenger vehicles is set to grow to $9.8bn by next year, according to Speero. The platform currently has more than 1,000 partners and service providers, with more than 750,000 registered customers across the country.
The company was self-funded in the beginning, with additional investment coming from its early employees.
“We have been fortunate to employ people who truly believed in our mission. While some of them have moved on, their belief in the product ensured they stayed invested in Speero, backing the team and our solutions,” said Mr Shamlan.
This month, Speero raised $1.8 million in an early stage (pre-Series A) funding round to expand its range and enter into new markets. To date, it has raised nearly $3m, with backing from international and local investors including Impact46, 500 Startups, Derayah, Saudi Venture Company, Access Bridge Ventures, Mountain Partners and Jameel Investment Management Company, better known as Jimco.
The company plans to use the new funding to strengthen its network in Saudi Arabia, create new digital processes and expand its offerings.
“We are rigorously investing in talent development … as a start-up we need to constantly keep learning. The day we stop learning is when we will fail,” said Mr Shamlan.
“We are grateful to have attracted the right partners who not only provided growth capital but also helped guide the evolution of Speero.”
Speero plans to raise more money to fuel its growth and reach.
“Raising a Series A round is the next logical step … further investment rounds will be aligned with our expansion strategy, allowing us to enter new markets and reach new audiences,” said Mr Shamlan.
Since its launch, Speero has consolidated its position in the Saudi market - the biggest economy in the Arab world. Although it is in no hurry to expand outside, the company plans to enter the UAE market next year.
“Over 40 per cent of the total GCC auto parts market is concentrated in Saudi Arabia and the opportunity for us here is very attractive,” said Mr Shamlan.
“Regional expansion is also a high priority for us and we will take lessons from our growth here [Saudi Arabia] and apply that to other markets ... we see high interest from partners and consumers in the UAE and we will look to build a product team there too.”
Since its launch, Speero has generated 3.5 million quotations for spare parts. The company has registered over 1 million downloads of its app on Google’s Android and Apple’s iOS mobile operating systems. It intends to grow its current volume of orders by 100 times within the next five years.
“Over the next five years we foresee that most auto parts sold in Saudi Arabia and in the region will be through digital platforms. This is our opportunity not just in the kingdom but across the region,” said Mr Mahfouz.
The company's founders don’t plan to exit the business and expect to be profitable in the near future.
“We are building a business to last and an exit is the last thing on our minds … this industry is a multi-billion dollar opportunity in the region ... while we can’t predict the future, being passionate entrepreneurs, we want to build to scale, rather than build to exit,” said Mr Shamlan.
“We are well placed to achieve profitability quickly, but our focus is on growth. We want to scale both user acquisition and the acceleration of product development to benefit our customers ... however, profitability will be achieved very soon.”
Q&A: Speero’s founders Abdullah Bin Shamlan and Ameen Mahfouz
Are you a risk taker?
Mr Shamlan: I am a risk taker. It fuels my desire to build fast-growth companies. I have worked with a number of start-ups previously, my perseverance and optimism have always served me well.
Mr Mahfouz: It’s always go big or go home. I prefer taking a calculated risk and do what it takes to land the desired results with minimal damage. You need to make sure you have a solid foundation and learn from previous experiences to support your future attempts.
If you could change one thing in your entrepreneurial journey, what would it be?
Mr Shamlan: Start-ups are hard to build but the sense of achievement cannot be compared to anything. Given my obsession with growth and constant learning, I should have started my entrepreneurship journey a bit earlier. However, I am really glad with how things have worked out and I am very excited about the future.
Are you actively hiring?
Mr Shamlan: Our headcount is growing between 20 per cent and 30 per cent every year, with the majority of roles emerging in the product and engineering departments to automate and scale our business. We will also hire for operations roles, but the current priority is product.
What is your outlook for the company?
Mr Shamlan: Our vision is to become the one-stop shop for all car owners and provide them access to all the services they need to enhance their ownership experience.
We are also on a mission to digitalise the after-sales auto industry and help offline vendors and repair shops automise their services and boost their business.
What new skills have you picked up in the process of launching Speero?
Mr Mahfouz: The experience of launching a start-up has taught me plenty of things. Some of the important lessons include always provide genuine value to customers, keep the team motivated and continuously challenge their skill sets and empower them.
Did the Covid-19 pandemic affect your business?
Mr Shamlan: Initially, we did see a significant slowdown as people were still coming to terms with the pandemic. However, when things reopened, we saw the change in consumers’ behaviour and now vendors are more accepting of it. The pandemic helped accelerate the growth of the supply side of the business and it was truly a game changer.
Who is your role model?
Mr Shamlan: I was blessed to work with great leaders throughout my career. I am forever grateful to them. However, in the start-up ecosystem, I would say my role model is Jack Ma, the founder of Alibaba.
Mr Mahfouz: Garrett Camp is my role model. I am so impressed with his leadership qualities. He has developed state-of-the-art technical solutions that have taken brands like Uber to where they are now. His passion to tap into an untouched market is a great inspiration to me.
Company name: Speero
Started: July 2017
Founders: Abdullah Bin Shamlan, Ameen Mahfouz and Abdulaziz Alashram
Industry: Automotive and technology
Initial investment: Undisclosed self-funded amount
Capital raised since inception: $3m
Investors: Impact46, 500 Startups, Derayah, SVC, Access Bridge Ventures, Mountain Partners and Jameel Investment Management Company