TAPSI WILL RULE THE MARKET

Tapsi was founded by three individuals, but the name of Milad Monshipour is particularly prominent. He is a young man seeking both a name and success, and he returned to Iran with ambitious plans. While TPC has a significant presence in Tehran, its activities have primarily focused on urban development. Milad states that Tapsi’s objective is to become the largest online taxi ordering system in Tehran and Iran. Mr.Monshipour is confident that he will achieve this ambitious goal within the next year, gaining significant market share from competitors. Although Mr.Manshipour declined to provide statistical data due to competitive considerations, or did not mention his future investor, one can infer the potential for significant developments based on the context of his remarks. Please note that in this interview, Mr.Manshipour offers criticism and accusations directed at a rival. These statements represent his personal opinion and reflect the views he expressed during the exclusive interview.

As the interview was conducted without the presence of other parties, Snap has the right to provide an explanation or denial if it chooses to do so.

 

 

• In addition to discussing Tapsi, please provide an overview of your experience in management and how it has contributed to the establishment of a business.

 

Over the past five years, numerous startups have been launched in America, Europe, and other countries around the world. Many of these startups have a strong management history, which is a testament to the value of management experience. I have also gained valuable management experience that I believe has prepared me to launch my own business. In Iran, successful startups often have managers who are knowledgeable and capable of driving success. For example, our competitor employs highly knowledgeable managers who are not visible to the public. These individuals oversee the business operations from behind the scenes. Managers such as Mahmoud Foz, the main manager of Snap, are worth half a million dollars and possess diverse skills. His contributions are instrumental in driving the company’s growth.

 

• Could you please confirm when you returned to Iran?

Four years after my initial visit to Iran for leisure purposes, I returned to undertake a course in management at Sharif University. During this period, I was continually grappling with personal challenges. However, the JCPOA issue also influenced my decision-making process. Naturally, my initial inclination was towards a business venture in the investment sector. This would entail sourcing capital and investing it in companies, with the eventual goal of selling the company at a profit. My objective was to enter this field in Iran. I had considerable experience in this field and had worked with approximately 20 teams in this area. Two years prior to returning to Iran, I conducted some research and identified that the primary challenge in Iran is financial rather than a concern about its management. During this research, I became acquainted with the field of technology and realised that the necessary infrastructure has been put in place in Iran, and that companies have grown.

 

• Please explain your rationale for entering the online taxi industry.

 

 

In all countries, there are a few businesses that are experiencing growth and have significant potential for further expansion. For instance, traditional retail businesses such as Amazon or Digikala have expanded in our country by leveraging this capacity. The transportation sector has significant potential for growth. At that time, our competitor had yet to expand significantly and was offering a limited number of trips. In any market, there are typically two main players who exert control over the market. Our team believed that we had the capacity to start a large business and become a significant player in the transportation industry. Consequently, I relocated to Iran in the final months of 1994, with Tapsi commencing operations in June 1995.

 

 

• You mentioned the potential for growth in the transportation market. The section you are in is related to the agency, the door and the telephone taxi. Could you kindly provide me with statistics regarding its annual turnover or the number of trips?

 

In the field of agencies, telephone taxis and door-to-door services in Iran, approximately 6 million trips are made.

 

• Could you kindly clarify how many of these trips are related to Tehran?

 

Approximately one million trips are related to Tehran. Naturally, the advent of online businesses has served to expand the market, as they offer lower prices, thereby driving up usage of these services. It is my expectation that the market will exceed 6 million and continue to grow, as online prices remain lower than those in traditional markets and are seen as an attractive proposition.

 

• What proportion of these 6 million trips are conducted online?

Which figure should I cite? (Laughs)

 

• I should focus on the figures of Milad Manshipour, rather than those of the competitor.

In my estimation, approximately 15 to 20% of this area has transitioned to an online presence.

• Could you kindly confirm the number of cities in which Tapsi is currently operational?

We are pleased to announce the full launch of our operations in 14 cities across Mashhad, Isfahan and Shiraz.

• Before we discuss your presence in other cities in Iran, could you please provide me with an overview of the extent to which the agency and car market in Tehran has become online?

The market in Tehran has expanded significantly and is likely to have surpassed one million trips per day.

• Could you please quantify the growth? Given your assertion that online transactions have contributed to this growth.

 

I would not be surprised if the number of trips added to the previous million were in the range of 400,000 to 500,000. This is because individuals who previously did not utilise the agency’s services are now doing so, while those who were customers of this market have now become long-term customers.

 

 

• Please advise what percentage of Tehran’s market is currently online?

 

I estimate it to be between 20 and 30%.

 

• If we assume that 30% of the taxi market in Tehran is online, what is the share of Tapsi in this figure?

I would prefer not to discuss Tehran in this context and instead focus on the country’s overall statistics.

 

• Could I ask why you have such difficulty in expressing numbers?

Our competitor has a particular expertise in misrepresenting data regarding market share and travel statistics.

 

 

• If you believe the figures are inaccurate, it would be prudent to present the statistical data for Tapsi to demonstrate the discrepancy. Snap Managers have recently announced that they process one million travel requests per day and claim to hold 85% of the market share for smart services in Iran. Mr. Manshipour has stated that this statistic is inaccurate. It is therefore recommended that TAPSI statistics be considered.

 

These statistics are likely to be inaccurate. It is advisable to divide any statistics provided by Snap by a factor of three or four in order to obtain accurate figures.

 

 

• Please provide the actual statistics for TPC. I did not come here to discuss your competitor, and I would prefer it if you focused your comments on Tapsi.

 

Our presence in 14 cities allows us to facilitate approximately 300,000 trips per day. Naturally, there are still a number of steps to be taken, as a further six cities are scheduled to be added to the current portfolio over the next two to three months.

 

• Could you give me an update on how many people are currently on the Tapsi team? I’m talking about those who are getting paid.

 

Our team currently comprises approximately 600 individuals, including those based at our head office and our marketing team, who are responsible for recruiting drivers on the street.

 

 

• I’d love to know more about the TAPSI trips in Tehran!

I am unable to provide statistics for each city, as this could potentially compromise our competitive position.

 

 

• What was the rationale behind Tapsi’s accelerated expansion into urban markets, in comparison to its competitor?

We commenced operations in the market one year after Snap did, and our initial plan was to expand to other cities first.

 

 

• Tapsi was an absolute rocket ship to the cities! why?

We arrived at the market one year after Snap did, so we were really excited to go to other cities first!

 

• So, you’ve accepted that your competitor is ahead and you’ve realised that you can’t get a large share of the Tehran market – but that’s OK!

It’s not about accepting. They came before us and now they’re leading the way in Tehran and Karaj. But in other cities, Tapsi is the first! Now, in terms of market share, we are sitting pretty at 60:40, with 60% of Snap’s share and 40% of Tapsi’s share!

• I’d love to know how many thousands of drivers Tapsi has now!

We have an incredible 250,000 registered drivers, with 150,000 of them actively working at different times!

• Let’s go back to the beginning of Tapsi’s launch! How much capital did you start with?

 

 Two other colleagues and I, namely Hamid Mohini and Homan Demirchi, had a total of about 150 thousand dollars in initial capital to start TAPSE – and we were ready to make it happen!

 

• To continue working, you must have needed more numbers. Could please elaborate on the sources from which you attracted capital?

 

We secured capital from both domestic and international sources. From this point onwards, we made the decision not to accept investment from overseas and to limit our group to domestic investors.

 

• Why?

 

The rationale behind this decision is that we have two types of overseas investors: those who have significant funds at their disposal and who therefore present a higher risk, and those who are in the country for a shorter period of time and therefore unable to inject a substantial amount of capital into the business. It would be preferable to avoid foreign investment in the transportation sector.

 

 

 

 

 

 

• How much capital was he willing to invest, but you were unable to secure it?

One million dollars.

 

• Was that a risk?

No, because we invested the same amount from the domestic investor.

 

• Could you clarify who the internal investor of Tapsi is and what kind of organization it represents?

Our investor is a consortium of several companies, including a number of telecommunicator firms and individuals with expertise in ICT from the private sector.

 

• How much capital is attracted from domestic investors?

 

(How many difficult questions you ask) There are two issues that prevent a clear answer: one is competition. We are now aware of the total amount raised by Snap to date, as well as the precise figures relating to Tapsi’s fundraising. The disclosure of these statistics presents a challenge for businesses.

Another issue that arises is related to investors who have transitioned from the traditional sector to the online sector. Once we provide them with the fundraising statistics, they often respond by stating that, given the amount of capital we have attracted, our valuation should be commensurate with that figure. The presentation of statistics challenges this traditional view, as it suggests that investors may be unaware of the business capacities and other issues related to a startup. This is why, for instance, our competitor persistently presents statistics that are not accurate. It is not solely due to his own actions that he publishes unrealistic statistics, but also because of the misleading TPC investors – people with a traditional view of the online field. Competition is also a factor.

Please clarify whether you have disclosed the amount of investment.

Our company has secured investment on three separate occasions. To date, we have attracted approximately $15 million in total investment.

 

• You did not mention the amount of investment?

We have raised capital in three separate rounds. In total, we have raised about $15 million so far.

 

 

• You mentioned that you are preparing to embark on a new fundraising phase.

 

I understand that the contracts have been finalised.

 

• Please advise the cost of this investment.

I must refrain from making a direct reference, as the injection of this money has not yet been finalised.

• You are operating in a highly competitive market. You have highlighted that your competitor is providing unrealistic statistics with the intention of misleading TPC investors. You have the opportunity to present real statistics that will impress others.

Given these considerations, it is not possible for me to provide an exact figure at this stage. However, I can confirm that, should the current fundraising campaign for TPC be successful, the objective is to reach two to three times that amount in the next phase. This investment will bring significant benefits to our business processes and drive substantial improvements in our operations.

 

•  What percentage have you contributed? One of the issues highlighted about your competitor is their lack of ownership in their business. Is this also a challenge for Tapsi?

I’m not in a position to share this statistic at this time. Disclosing these figures could have a negative impact on my business. They are among the company’s confidential information, and their disclosure could create difficulties, particularly during the initial and middle stages of fundraising.

 

• To date, your investment has amounted to approximately 15 million dollars. You have indicated that you are aware of your competitor’s fundraising activities. Could you please provide me with the amount of capital they have raised to date?

 

I believe the total raised to date is approximately 20 million dollars.

 

 

 

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• The market in which you are present is highly competitive, and it is uncommon to find two startups that provide such robust support to one another in their growth and advancement. In this market, your competitor has been subjected to a number of unfortunate incidents, including a form of sexual assault. Does Tapsi consider such occurrences to be beneficial?

 

Indeed, the market in which we operate has reached a point where competition is no longer straightforward. We regularly inform the relevant authorities that the presence of foreign companies in Iran, operating under Iranian legislation, has resulted in activities that have occasionally contravened professional standards.

We are not pleased about incidents outside the business environment, such as instances of sexual assault. Our success depends on how we implement our ideas, and we believe that our competitors’ mistakes, rather than such incidents, present challenges for us.

 

• Naturally, other activists in the same field also utilised billboards with the content “Travel at what price?” At the municipal level, they attempted to capitalise on this ambiguous opportunity.

 

Indeed, they were minor competitors who capitalised on the impact of this incident. We maintained a strict silence on this matter, even in discussions with officials where we did not address this issue. Instead, we defended the system as a whole. If the public loses confidence in a system, it will have a detrimental impact on all stakeholders, including activists and the industry as a whole. Apart from the professional and business aspects of the situation, I believe it is inappropriate to exploit a tragic incident for personal or business gain.

 

• One of the topics of discussion following this incident was the procedure for assisting the driver from the side of the street. Please adopt the same approach. I would like to inquire as to whether you intend to alter this approach.

 

Like our competitors, we hire drivers from the side of the street, but we believe that Tapsi offers a more secure hiring process.

 

• Please explain the rationale behind this assertion.

 

We have a robust team with a strong skill set. Our personnel are selected on the basis of their experience in law enforcement. Our independent security team designs projects with the objective of greatly reducing the likelihood of attracting drivers with problematic behaviour. We utilise technology that monitors driver behaviour to achieve this. In the event of an incident, our security team will promptly intervene to prevent further occurrences.

 

 

• Please confirm whether the measures you have put in place, as detailed above, reduce the risk of accidents to zero?

 

However, it is not realistic to eliminate the possibility of an accident entirely. We are committed to reducing the likelihood of accidents occurring.

 

•  The Snap office in Kerman was attacked. How do you feel about this?

 

I was saddened by this incident. The children must be having a bad day now, because we have a history of attacks on our office in Tehran and we spent very hard and bad hours. Such an incident is very nerve-wracking because a lot of money and energy is spent and a difficult situation is created with such encounters.

 

• What is the rationale behind this fronting?

 

The managers of our cities are native to the same city, as are the drivers. I do not anticipate any significant issues. The concept of nationalism is being misused, which is an unfortunate misuse of a valuable resource. To illustrate, we observed this sentiment in Tabriz.

 

• In the early days , competition was intense. The traditional market structure was clearly visible, and there were frequent protests. Given your prolonged absence from Iran, how do you navigate this environment?

 

In terms of market competition with Snap, we encountered a number of challenges and difficulties. As an illustration, an email from Internet Rocket was sent to Tapsi employees who were the subject of misleading offers. To illustrate, one of Tapsi’s children was presented with the opportunity to assume the role of marketing manager at Pintopin. However, that individual acknowledged that such a position was not aligned with their skill set and experience. In reality, their intention was only to destabilise Tapsi.

 

• Have these actions had an impact on your business?

 

None of our kids have responded positively to these requests. Of course, because of the competition issue, the offers are not directly to Snap, but to other rocket startups, so they don’t say we will give you a position in Snap, but they suggested Pintapin or Bamilo, etc.. They also offered very high wages. Of course, their aim was not to hire people, but to deprive the competition of skilled labour, and after a few months they fired the people they had hired. Rocket has done similar things in other countries.

                                             

 

 

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• In the interview I read, you mentioned that Snap prohibits drivers from installing the Tapsi application and makes it impossible for them to access it. Can you explain this?

 

Nowhere in the world do you see online taxi software that prohibits drivers from installing other software, because the driver is also our customer and there is no employer relationship between us and the drivers. But our competitor somehow thinks that the drivers are his employees.

 

• Apparently you had a complaint about this and Snape was acquitted.

 

We voted 5 to 5 and the case has now been appealed. There is this issue right now, and as a result, Cafe Bazaar has removed Snap. There is also a rule in the App Store that if an app prevents the installation of other apps that are close to its domain, it cannot be in the App Store. So if there was such a law, Uber would not allow another company to step in, and if we did the same, a third competitor would not be able to enter the market. In Saudi Arabia, Pakistan, India and so on, they do not allow one startup to restrict others. This has happened in the absence of legislation and should be reconsidered. Now drivers have to spend at least another 700,000 tomans and have another phone to use Tapsi.

 

                               

                               

 

 

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• The market for online taxi businesses is growing, with statistics showing that there are currently 30 start-ups operating in the transport market in the country. Does the market have such a need? Will these startups have a chance to compete with Tapsi and Snap?

 

 

30 is a figure that includes all the start-ups in passenger and freight transport, including intercity transport. There are now about 15 car-hailing apps active in the country. The reality of these businesses is that they are scalable, and beyond a certain level of scalability, the costs increase so much that you need to have as much money and knowledge as Karim and Uber to continue working.

 

• Maxim has also entered the Iranian market. Aren’t you worried about that? Can it be a serious competitor for you?

 

We will never be worried about Maxim because it is the number 3 company in the online taxi market in Russia and has two and a half million installations in Russia itself and several countries in Central Asia, but we have more than 5 million installations in Iran. Whereas Uber, for example, has up to 12 million installations in Russia. So Maxim is not a strong company. The capital they have brought into the Iranian market is not a significant amount.

 

• Apparently they have invested up to one million euros or 5 billion tomans.

 

Yes, there is not much money for the Iranian market, and more importantly, Maxim’s technology is not very strong.

 

• So, apart from the current rival, for example, are you not worried about Carpino or Ding and others?

 

We were worried about Carpino and we were monitoring him and counting the number of his drivers and… because he had a very strong management team. For example, Iman Hajizadeh was the first person to launch this app, who was one of the businessmen who was perhaps unique in Iran. But the good thing that happened was that Iman left Carpino. Carpino’s technology is a bit problematic because it came from abroad. We are now watching Ding and it is not wise to say that it is small and will not reach us.

 

 

• One of the things that government bodies and even agencies sometimes raise about online taxis, and maybe they still do, is that you bring drivers from towns around Tehran up to the level of this metropolis and increase air pollution. You recently announced the launch of the carpooling system. In this case, tell me where it is and when it will be implemented, and what problem it is supposed to solve?

 

In every city we go to, we use drivers from the same city, and the fact that we bring people from the city to Tehran cannot be true. By the way, we create jobs for drivers in the cities. Even since last year, we have not allowed the registration of city plates in the city of Tehran for Tpsi, and according to the statistics we got last year, less than one percent of our fleet were city drivers, and the driver of each city has to work in his own city. We help much more with carpooling. Because one trip can take two people to their destination. Of course, over time they can take more than two people. This is a very complex technology and it is not easy to implement.

 

 

• What are the main investment issues in the ecosystem?

 

The main problem is that we have no money in Iran, because foreign money is not coming into Iran and domestic money is being invested somewhere. So the issue of money is an important issue for the ecosystem and all industries. The good thing about startups is that they don’t need a lot of money, and compared to huge industrial projects with several hundred thousand billion tomans, investing in startups is not a very big investment.

 

• The new investments in the ecosystem have created a kind of bipolar space between Rocket and Sirava; a space that could give the impression that Sarava could also be an investor in Tapsi. Your new investor is not Sarava?

 

 

In the Iranian ecosystem, Sarava has always been a leader, and it can be said that it is at least one of the few investment funds that understands startup literature. More importantly, it has been able to convince many people from the traditional sector to put their money into the startup sector. Even if it only has one success story, Digikala, that is enough to inspire confidence. As a result, not only does it have considerable financial power, but it also understands the knowledge and literature of the field, and startups work with it. Since Rocket entered the Iranian market, which is a developing market, a kind of competition has emerged. This competition prevents any company from being monopolised. Even we ourselves, when we entered this field, wanted to somehow prevent Sarava from being monopolised by convincing traditional investors to invest in this field. Of course, it will happen that more investors will enter the market.

 

• My purpose in asking the above question, in addition to the good explanations you gave, was that Sarawa never offered you an investment?

 

We have been negotiating with Sarava from day one.

 

 

Why didn’t you get the result?

There have always been suggestions and we have maintained our relationship with Sarava.

 

• Why didn’t you get the result?

 

 

There have always been suggestions and we have maintained our relationship with Sarava.

 

• Tell me, what value do you see in Tapsi as a company?

 

(After a long pause) We are now in the critical position of attracting capital and finalising and investing that money. So I can’t talk about the current value of Tpsi. But I can tell you about the previous stage of our investment. A year ago, Tapsi was much smaller and we were only present in Tehran, and Snap, for example, had only 18,000 trips per day. At the time, investors valued Tapsi at up to $30 million. That figure has now multiplied many times over. At that time we also had an offer from Karim.

 

• Why didn’t you accept?

 

We didn’t want to be employees and we wanted to have our own business. Of course, the fact that some of Karim’s investors were from Saudi Arabia also played a part in our not working with them, and we were actually trying to move forward with less risk. At the time, they could put good money and good technology into TPC. Now, of course, we don’t lack anything from them in terms of technology.

 

 

• Does Tapsi want to be number one in Tehran and Iran?

Yes, we do.

 

• Is it possible?

Yes

 

• When does this happen? Why are you so interested in statistics on Tehran?

 

Because of its attractiveness and the high volume of travel requests.

In the area of the country where we are experiencing good growth now and where we will be number one in the next 8 months to a year.

 

• When will you be number one in Tehran?

 

In the next year or two.

 

• And you are leaving Snap behind?

Yes.

 

• Why are you so confident of growth?

 

At the end of the day, even with the same investment, it is the skill and strategy of the team that determines success. Everyone knows the club and experience has shown that it has a short-term strategy. It takes the business to a stage of success and then exits. Right now, you can understand this view of Rocket from the launch of Snapfood and Snaptrip. Of course, from a professional and business point of view, this decision is wrong and they are ruining the big business with the so-called small business.

So it makes sense to start these businesses if you want to get out of them after a year or two.

Another important point has to do with the team. Snap’s management team is not Iranian. So you can see from the way the people in the Snap team are arranged that they have built the exit. In this case, we have a stronger team and by attracting the same capital, we can grow more. This ensures that we will reach our goal in the timeframe I mentioned.

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The friendship that began in Sampad and reached Tapsi

Milad Manshipour was born in Tehran in 1361. He entered Sampad in the first year of middle school and studied there for 7 years, and was a classmate of Hamid Mohini, who is now his partner.

 

He says that at Sampad you learn how to work with others and be a team and… all kinds of students from all walks of life and ways of thinking were there and this also taught him a kind of compatibility with other ideas and actually being a team. . Milad says: “From the years when we were alone with my mother, that is, from childhood, I had come to the conclusion that I should not cause trouble, and since I was a child I thought that I had no one but myself and that there were no strange supports for me. That’s why I thought I should stand on my own two feet, and after passing my exams I started tutoring.

 

International experience

The co-founder of TAPSI studied mechanical engineering at the University of Tehran. After graduating, he came to the conclusion that he did not want to continue his studies in engineering. He says: “I didn’t know exactly what other field I wanted to study or what other work I wanted to do, but engineering was definitely not my future”. After graduating, he went to work for an oil company.

 

 

says:

Being in this company really put me on the international labour market. Seeing the path to management put me on the path to business. “Management appealed to me. Milad says: “Because of my interest in management, even though I had been working in the oil and gas sector for two years, I came to the conclusion that I wanted to work in management, so I decided to do an MBA.

But my personal plan to leave Iran was not suitable because my mother was alone and I was her only child and I had lived with my mother since I was two years old. So it was a very difficult decision. But in the end I decided to leave and when I left I stayed there for ten or eleven years.

 

Eventually his mother joined him after five years. He has lived in Europe for two years, in the UAE for two years and in Canada and America for more than five years, working in management.

 

Working with adults

After completing my MBA, I started working as a management consultant. There are 3 companies in the world that are very difficult to work in and enter, such as Mackenzie, Bill and BCG. 20-30% of the managers of big companies have been in one of these three firms and it works like a school.

 

Even some of the presidents of the countries have experience of working in one of these three companies. These companies are like schools. They attract talent from universities and schools, and by creating a working environment, they not only use that talent to develop the business to the best of their ability, but also give them significant management experience. I worked there for 100 hours a week.

Our work was very difficult and we had to advise big companies like Dell, Coca-Cola, etc. on how to be better! It was very hard work. One of the companies we worked with, called Husky, makes 90% of the plastic soda bottles in the world. We had a project with them on how to increase their market share!

 

 

After a while, Milad worked as a project manager; expensive projects costing between a million and a million and a half dollars a month.

 

Travelling to Iran

He came to Iran for a short trip 6 years ago. He goes to Sharif University and runs a training course on management strategy.

 

He says:

 “During this course I got to know the business environment in Iran and I said to myself that there is a lot of work to be done in Iran. I saw that the business problems in Iran are not unique to Iran, but also exist in other countries. Every place has its own problems depending on the space it has. I felt that I wanted to see the impact of my work first hand and I felt that I wanted to own my own business instead of living and working as an employee for a company.The work and management experience and training I had in this area gave me the motivation to succeed.