By Amir Farha
I have been lucky enough to have my cousin, Dany Farha, as my partner at BECO Capital. Dany is one of the most successful serial entrepreneurs in the MENA region and co-founder of Bayt.com, the largest job site in the Middle East. He and his founding team at Bayt are true veterans of the dotcom space in the Middle East; they have helped fill jobs, educate consumers and enterprise on the benefits of the Internet, and build the next generation of technology entrepreneurs, including Dan Stuart and Sohrab Jahanbani, founders of GoNabit, the daily deal website that was acquired by Living Social.
Bayt.com was founded in 2001 by one of the best teams that the MENA region has ever seen:
- Rabea Ataya (CEO), previously founded InfoFort which he sold toAramex for a figured rumoured to be in the US$ double digit millions, before starting Bayt.com,
- Dany Farha (COO), previously founded InterCat (one of the largest industrial catering company in the UAE) and Butlers (largest commercial laundry business in the UAE),
- Mona Ataya (CMO), previously Global Skincare Franchise Manager at J&J and
- Akram Assaf (CTO), previously at Oracle where he was responsible for implementation of applications and databases.
Each founder had a specialised skill-set and a track record of success, which is evident in the amazing execution and market share that they have built today. It’s a B2B model where Bayt.com would offer recruitment packages to SMEs and large enterprises in exchange for a monthly fee. With print classifieds being the only option to find jobs at the time, the Internet provided for a more efficient medium to reach a wider audience of both job seekers and employers. Today, it is the most profitable Internet business in the Middle East.
The founders started the company with their own capital, initially seeding the business in order to build the platform and generate traction, before they went out to raise growth capital. At the time, the Internet was still a new phenomenon, and Google and Facebook didn’t exist, making marketing a big challenge. To solve this problem, one of the amazing things Bayt did was partner with Maktoob to power a jobs section on their website. This partnership allowed them to generate traffic with little to no marketing expense. They managed to grow their user base to over 500,000 registered CVs and leverage that audience to start selling job packages to businesses and generate revenue. Their product was best-in-class at the time, even better than the International job portals that existed elsewhere (e.g. Monster.com was the leader then). With the founders capital, the company managed to set up sales offices in 9 markets, since their model relied on both on-the-ground sales staff and telesales personnel to approach corporates and demo their product.
Once they established sufficient traction and a presence across the MENA region, the founders went out to raise more capital to expand. They were funded with around $3m in cash by several angel investors, who were eventually partially acquired by Tiger Global in 2007 (where Tiger invested $10m to clean up the cap table). The company has been profitable since their 2nd year of operations and has continued to grow year on year. The main reason for their success in this space boils down to execution. At the time, Career Egypt was the main threat to Bayt. They had launched in a large market and were looking to expand into other territories. As part of their strategy to fend off competition, Bayt set up an office in Egypt to distract their rival from expanding outside that market, giving Bayt enough time to strengthen their presence in 8 other markets and build market share.
In those years, a first mover advantage was significant. Bayt managed to lead the market for 4 years before any of the large International players entered MENA. Competition benefited Bayt and helped grow the market, as more money and resources were invested in educating businesses on online recruitment market. The only challenge it created was price competition. When the likes of Monster and Naukri came into the Middle East, they were able to offer customers much lower prices relative to Bayt.com, since their offices were based in India and therefore had a much lower cost structure. In order for Bayt to ensure market leadership, it had to reduce prices, which impacted the potential of the business. However, despite this problem and as a result of the first mover advantage, strong sales execution and amazing product offering that Bayt had, they were able to capture 70% of the job site market in the Middle East.
Selling the packages in the early days was a huge problem, with slow connections and limited bandwidth, meaning that giving product demos would take many minutes and hours vs. seconds today. Even with these infrastructure constraints, the value proposition was clear and more companies were jumping on board. Migrating jobs from print to online was the future and businesses eventually adopted this strategy, especially as Bayt.com continued to grow its database of CVs (now sitting at close to 20m). Today the company does over $20m in sales and even launched several new tech ventures through its sales network across the region. The most notable being GoNabit, founded by Dan Stuart (ex-Bayt.com) and Sohrab Jahanbani, which was sold to Living Social in 2011 after only 1.5 years of operations. Bayt, driven by its entrepreneurial founders, continues to explore new ventures, both internally (through new product offerings for its customers) and externally through launching new tech ventures (Doctoruna and YallaMotor). Mona Ataya, one of the co-founders who was CMO of Bayt.com, started her own venture, Momzworld, which is a leader in its category and has raised venture capital.
Bayt is a great example of the importance of building an amazing founding team, especially ones with experts that cover the key areas of the business. They were an execution machine, and I believe that they could have dominated the job site category in any market they chose, including the US (which was still relatively small at the time they launched). These Internet pioneers and amazing entrepreneurs continue to help grow the entrepreneurial ecosystem today through the launch of new startups and investing in early stage ventures, and without them there would be fewer success stories that we could learn from.
I am very optimistic about what the future holds for the founders, and the graduates of Bayt.com, and I commend them for their impact, accomplishments and contribution to our entrepreneurial ecosystem.