The bus startup no VC wanted now runs 900 vehicles

A mobility story Muzamil wanted explained

Muzamil opens with the Endeavor Pakistan series, which is looking for fifty of the most exciting startups and businesses in the country. This guest had been on his radar since the season’s first episode, when Yango’s country head mentioned her as a former colleague.

Everyone has an opinion on transport, he says, because Pakistan’s biggest startup success and its biggest failure both came from it. He admits he does not understand it, so he turned to someone building the next wave: Maha Shahzad, founder and CEO of Buscaro, which he describes as something like ride-hailing for buses.

Maha’s first move is a correction. Muzamil, she says, has one of the old guard sitting in front of him anyway. There is no mobility tech company he could praise or criticise that she does not in some way represent.

Four hours on a bus to get to college

Maha calls herself a college dropout. She was born in Karachi and grew up between Karachi, the US, Europe and Japan. Her father’s business ran between Europe and Japan, and her mother was unwell and needed treatment in the US. Karachi was home base, but she spent perhaps three or four months a year there. “I used to live out of a suitcase,” she says.

Muzamil, father of a four-year-old, asks whether it was hard. Maha says she knew no other way. Looking back, she had no friends her own age, and her father was her best friend. Travel made up for the academics. What she missed were school friendships and play.

Her family moved to the US when she was a teenager. She stayed in Karachi, then went to the US for college. That is where she says she learned her first startup lesson: be careful about the terms you set with the people on your cap table. She did not want her father on hers. Instead of a fancy college she took odd jobs. Her family was well off, so she did not qualify for financial aid. She planned to go back to school when she could afford it. By the time she could, she was busy with work she loved.

California shaped the rest. With more cars than people, she says, its public transport was worse than Karachi’s. A 20-minute journey took her four hours of buses, trains and waiting. The maths of her days made no sense, and that became an obsession with mobility. While her friends partied in London on their fathers’ money, she was getting up at 3 a.m. to change buses. She was angry then. Now she says the business fundamentals she learned in those jobs are the same ones she uses twenty years later.

Foodpanda, Careem and refusing the box

Her first stint in Pakistan came in 2013 to 2014. She was visiting her grandmother and told a friend at a restaurant that she wanted to spend time in Karachi. A stranger overheard and offered to connect her with a friend in HR. The company was Foodpanda, which had just launched. Hired for marketing, she wanted sales, so she flew out on her own money to sign restaurants.

She kept complaining at Foodpanda about the yellow taxis eating her salary. A couple of years later a close friend from Foodpanda went to Careem and asked whether she planned to keep talking or start doing. Within 12 hours she had taken Careem’s test and interviewed. Within 36 hours she had sublet her New York apartment and moved to Karachi. She settled in Pakistan in 2017, expecting a short stint, and is still there eight years later.

On paper she led business development. She remembers a startup on steroids, where you could not find a chair in the Karachi office at 10 p.m.

Muzamil notes the one-year stints on her CV. Maha says her performance in each was off the charts, and the jumps came from assumptions about what she could do. Careem, she says, did not think a woman with no degree could manage a P&L or run operations. “You can’t make me believe that there is something that I cannot do,” she says.

After Careem, for six months, companies offered her four times her pay to do business development, and she kept saying no. Then the founder of Cheetay called and offered her the work she wanted, as long as she also did the work he wanted. She set up Cheetay in Islamabad and Karachi when it ran only in Lahore, and within weeks Karachi was bigger than Lahore.

Muzamil plays devil’s advocate. With so many applicants, he argues, employers use degrees as a cheap filter, and someone like Maha is one in a million. She disagrees. Her whole founding team of three has no degrees, and people who missed the chance are on a mission to outwork you. “220 million population, there’s enough Mahas running around,” she says. Muzamil adds a caution: skipping a degree means working harder to learn what college would have taught.

How Islamabad became Swvl’s biggest market

Swvl, Maha says, would not give her a P&L role either, because the same Careem people were there. She got in on a consultancy agreement and applied to run Karachi. She was rejected. She flew to Lahore, where the GM Pakistan was, and pretended she was already in town to ask for coffee. There was a thunderstorm, and he showed up anyway. She asked him to test her on P&L management. She passed a set of live tests and still did not get the job.

Then Islamabad came up. Three people had turned it down, and Swvl needed someone within 36 hours. On her first day a global head told her the city was being shut down. Swvl had limited new capacity to a couple of vehicles at a time. Her instinct was that adding enough capacity in one go would let her optimise the network and fill every seat. She tripled capacity overnight against orders. “I knew I’m either getting fired or people are clapping tomorrow night,” she says. Islamabad grew to twice the size of Karachi within months and became Swvl’s highest-booking market globally. She was handed Karachi, then all of Pakistan.

She credits a strong team and a city nobody took seriously. Careem had already taught her that Islamabad booked more rides than Karachi, and commuters from Wah Cantt and Pindi made routes easy to start.

Muzamil ran campaigns with Swvl in 2018 and 2019 and found the product confusing: a bus he had to walk to, but also had to request. Maha explains that it was a cheaper alternative to ride-hailing. You booked a seat and walked to a pick-up point, and pre-booking kept buses from overfilling, a safety issue in public transport. She concedes Swvl could have marketed it better.

What actually broke Swvl in Pakistan

Maha calls the question unfair. Swvl’s whole life included a pandemic with no transport and a market crash a year later. She believes Swvl Pakistan would have turned profitable with one more year. When it shut down she asked for 50,000 dollars, no salary and free interns to build a smaller profitable business. As a public company, Swvl said no.

She is angry at how people describe the economics. In her view it was a price war. Swvl and Airlift both had a lot of money, and when one burned the other had to follow. A vehicle she acquires today for 80,000 rupees cost 2.5 lakh rupees then. A customer who would happily pay 150 or 200 rupees was charged 20. “These were arguably self-made problems,” she says. Investors also wanted hyperscale growth then, and they did not ask Swvl for the sustainability they ask of Buscaro today.

Muzamil asks whether the burn came from founders or investors. Maha points to dilution. After early rounds, the founder is often not calling the shots, and every investor wants valuations to jump before selling on. Careem and Uber burned money too before turning profitable. She calls herself the “self-confessed queen of hyper scaling,” a habit she had to unlearn when Buscaro began. If a few hundred million dollars arrived in Pakistan next year, she adds, this conversation would sound very different.

Muzamil argues that Pakistan is not a good hyperscale market, because margins here are razor thin and the winners will grow step by step over ten to twenty years. Maha agrees, and adds that Pakistan is a cheap place to build teams and test new verticals. She makes one correction: Careem did not exit Pakistan, Uber did. Fuel is what changed since Careem arrived in 2015, so models built then no longer hold. B2C rides have no stickiness, and price wars are back. Buscaro, she says, costs about 20 percent of a Careem ride, cheaper than a bike over longer distances, without subsidies.

The end came fast. Swvl listed on Nasdaq on 31 March, and Maha had a panic attack in New York that morning. Pakistan grew strongly through Ramzan. In May she handed out team awards on a Friday, and the next Wednesday she got the call that it was over. The B2C and travel verticals shut that day. Out of a Pakistan team of a few hundred, she moved whoever she could to B2B, mostly supply staff. She turned down a central role and kept trying to save the business until Mustafa sent a voice note weeks later saying they could not.

Swvl itself started over with B2B and SaaS, she says, and is now net revenue positive. She calls the comeback by Mustafa and his team “one hell of a story.”

A bus started from LinkedIn messages

Maha never wanted to be a founder. The day after she left, three people walked into her apartment, opened their laptops and assumed this was their work now. Her father called while she was in tears. He told her she had run the buses before, so she should go and run them now, and stop making excuses.

Customers were furious. On her personal LinkedIn, people told her she had ruined their lives. One asked how her daughter would get to school. Another said she had started working only because Swvl existed. Maha used some of those messages to draw a first route, and one bus started running. “Today we run 900,” she says. “I just watched it happen.”

Raising money for the most unsexy business

For the first six months she did one thing: fundraise. Airlift and Swvl were collapsing, the country was flooded and capital had dried up globally. “One crazy woman says, I will do a mobility tech company,” she says. She was the butt of every joke, pitching around the clock across time zones while her team maxed out her credit cards, the only capital they had. Two co-founders gave up within a few phone calls.

VCs told her they were not interested in Pakistan and definitely not in mobility. Do something else, they said, and we will write a cheque. What worked was one investor who had his due diligence done by Safi Shah, Uber’s former country head. Safi skipped the usual pitch and asked her to talk operations: marketing, customer acquisition, retention. After a two-hour operator-to-operator conversation he told the investor it was doable and that this was the right team. That became her first cheque, about five months in. An angel round followed within a month. “I am the most unsexy business on the planet,” she says, so she went after operators.

At one low point in 2022, every investor she had called, bar one, had said no. She told the office to shut it down and switched off her phone for 14 hours. The next morning, card alerts showed the team still spending on marketing. Zawar, a 22-year-old founding member, told her Buscaro was being built anyway. Did she want to come in as a founder, or should they call her when they could afford to hire her as CEO? She burst out laughing and went to the office. At 5 a.m. the next day an email arrived committing 160,000 dollars. Her lesson is that teams who respect the mission more than the founder are what keep a company alive.

The rounds that followed came partly from people who had said no early. Buscaro raised a 1.5 million dollar pre-seed led by Orbit, which included 500,000 dollars of angel money. It has just announced a 2 million dollar seed round led by Daman Investments, with Epic Angels, Wahid and other angels, and Accelerate Prosperity. Muzamil asks whether the last was a grant. “I would love free money,” Maha says. “I’ve never gotten a grant.”

People came the same way. When Buscaro launched Lahore, she asked another founder to release her former colleague Zuhaib Ahmed by the next morning. Zuhaib asked only which city to book a bus to, and was in the Lahore office the next day with no contract and no talk of pay.

Trust was the hardest part. Customers had moved to tech once and been forced back to local transporters, and suppliers did not trust “burger bachay” in suits. A year ago Buscaro was hearing no from clients. Now it struggles to meet demand, and supply turned earlier this year.

Three businesses and an app for a conductor

Asked to explain the value simply, Maha splits Buscaro into three businesses.

The first is B2B. Companies get compliance, safety and, above all, reliability. If a factory shift starts at 8:15 instead of 8:00, the lost time is costly, so arriving at 7:58 is worth more than any premium. Buscaro can look dearer on a quotation, she says, yet it bills cheaper. A local transporter might charge a 20-mile route as 40 miles, and her tech makes that impossible.

The second is B2B2C, sold to commuters through companies and schools. Against a public bus or a neighbourhood van, Buscaro is cheaper and safer. Higher utilization means she earns from 13 riders what others earn from five, and the driver earns more too. The third, still being built, is B2G: helping government public transport run more efficiently.

Buscaro owns no vehicles. It works with individuals who own and drive their own, usually on an agreed monthly rent. Buscaro trains them and runs the operations, and they follow the app. Muzamil compares it to the school van wala with his conductor, who quoted 5,000 rupees and then raised it to 7,000 mid-month when petrol went up. Maha accepts the comparison. The app is the conductor.

Muzamil assumes the challenge is vehicle utilization, since everyone needs buses at 8 a.m. Maha says that theory has failed every mobility company. “In Pakistan, 70-plus percent of your cost is actually fuel,” she says. So she would rather a vehicle sat idle than ran with two or three people inside. Some B2B clients even pay to keep a vehicle parked and available only to them.

Safety for women and children

Women and children make up 70 percent of Buscaro’s users. Maha rejects Muzamil’s word “public service.” Safe transport, she says, is a right they should have had in the first place.

The safety work is mostly operational. Buscaro works with a security agency that deploys an emergency response team. Every captain gets a background check, gender-sensitization training and app training. Vehicles are inspected and monitored constantly, and a wrong turn triggers a call. Parents now have their own tracking app, and schools get an admin dashboard. Each seat holds one booking, because most harassment in public transport, she says, comes with overcrowding. Drivers are trained to watch, other passengers are present, and call masking sits on top.

Schools have a strong reason to sign up. In Punjab, Maha says, schools are now required by law to move at least 50 percent of student movement to high-capacity vehicles, following a court order. Buscaro convinces a school on safety, then the school emails parents or lets Buscaro set up a stall on parent-teacher day. It grows branch by branch. With Beaconhouse it has persuaded one campus to let a bus pick up children from a neighbouring campus on the way. Children from different schools do not yet share a bus.

Scale, working capital and 2050

Maha gives the numbers plainly. Buscaro’s annualized top line is 6.5 million dollars. The business has doubled in the last eight months. It runs in Karachi, Lahore and Islamabad and the cities around them, such as Hub and Sheikhupura, with a team of about 70. It has been contribution-margin positive since day one and sits at about negative 2 percent EBITDA. It could break even on 24 hours’ notice, she says, but would rather keep building.

So why raise millions? Working capital. Clients pay 30 days after costs begin, there are no debt funds, and banks will give a transporter a credit line but not her. Buscaro moved from pure equity to expensive debt to build a repayment record, and is now working with banks. “My burn is $15,000 a month,” she says. “It’s a joke.” Much of the new 2 million dollars will go to working capital. Other cities will come once the first three are solved.

Over the next five years, she says, government and the private sector will have to work together for scalable solutions. Her goal for Buscaro is simple: nobody left out of affordable, safe transport.

On Pakistan in 2050, she skips the ifs and buts. “If I wasn’t delusional enough to believe that we have a very, very bright future ahead of us in 25 years, I would not have been doing what I do,” she says. She hopes to have played a small role by solving one problem. Muzamil calls it a public service anyway, and says this is the first time mobility in Pakistan has made sense to him.