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By Meg Flippin, Benzinga
Ride-hailing is taking off in Türkiye, particularly in cities from Istanbul to Izmir to Antalya, as the middle class grows, the population increases and people trade private vehicles and public transportation for on-demand rides. Marti Technologies Inc. (NYSEAMERICAN: MRT), the leading mobility app company hailing from Türkiye, is capitalizing on that growing demand.
The company, which launched its app in 2019, matches riders with car and motorcycle drivers and operates a large fleet of rental e-mopeds, e-bikes and e-scooters. Marti Technologies reports that it became the number one mobility app in Turkiye in 2020, a year after its application launch, and has retained that position every year since. The company also reports that it has over 4.5 million unique riders on its application, and its ride-hailing service boasts 452,000 unique riders and 100,000 registered drivers. All of Marti’s offerings are serviced by proprietary software systems and IoT infrastructure.
Another important milestone, one that's rare for a Turkish company, is a direct U.S. listing. But that’s exactly what Marti accomplished this past summer, debuting on the NYSE. Marti was able to pull off the U.S. listing by merging with Galata Acquisition Corp. (NYSE: GLTA). The deal was first announced in August of 2022, and Marti began trading about a year later.
Marti reports that its NYSE debut was the first direct listing of a company in Türkiye, and it is expected to serve as a model for other companies in Türkiye and the region that want to tap the public markets in the U.S. The fact that Marti chose this pioneering financing model underscores the growth potential for ride-hailing in the country, particularly in the Turkish metropolises. Marti’s public listing was recognized as the International Equity Capital MarketsDeal of the Year by Bonds, Loans, and ESG Capital Markets CEE (Central and Eastern Europe), CIS (Commonwealth of Independent States) & Türkiye Awards 2023. McKinsey & Company, the consulting firm, estimates the taxi market size in Türkiye was between $9 billion to $12 billion as of 2021. By 2030, McKinsey & Co. forecasts that the ride-hailing market could grow to between $15 billion and $20 billion.
When the deal was first announced, Marti said the U.S. listing would help it go after the fast-growing Türkiye market, maintain its leadership position, expand its scale and reach to retain customers – and do all of it in an environmentally friendly way. “In its first four years, Marti has achieved significant traction for its mobility products, strong growth and best-in-class unit profitability,” Alper Oktem, Founder and CEO of Marti, said at the time. “We are privileged to have the support of top-tier investors and access to the U.S. capital markets following the closing of this proposed transaction, which will leave Marti well-capitalized to seek to become Türkiye’s first mobility super app by expanding into other attractive adjacencies, leveraging our growing and loyal customer base.”
Since that announcement, Marti seems to have checked all those boxes and then some, showcasing growth that seems similar to ride-hailing leaders in the U.S. such as Uber Technologies Inc. (NYSE: UBER). Month-over-month in December Marti saw ride-hailing riders grow 19% and registered drivers grow 11%. Both areas grew faster than the company expected, underscoring how big of an unmet need it serves. Given the growth in riders and drivers, the company expects to have more than 700,000 riders and over 120,000 registered drivers by March 31, 2024.
If Uber is any evidence, those double-digit growth rates may continue as Marti establishes itself as a leader in the region. For Uber’s third quarter, which it announced in November, the ride-hailing leader posted a 31% year-over-year increase in mobility gross bookings – and that’s in saturated markets. More importantly, it was able to achieve profitability in its ride-hailing business, the largest part of its operation.
While Marti is currently in a legal battle with the taxi association of Istanbul, the notoriously poor quality of service of taxis in the city clearly suggests that an alternative solution is necessary. The UEFA Champions League final, soccer's most prestigious club event globally, took place in Istanbul in 2023, and the competition's governing body UEFA advised all fans and tourists visiting the city to not use taxis for transportation. The problems endemic to the taxi sector in Turkey range from not picking up locals to charging exorbitant unmetered fees to tourists to verbal and physical violence.
Marti may be focused on ride-hailing for now, but the company plans to expand into other areas of mobility and services, which will increase sales and improve its bottom line. While it's sporting a market capitalization of around $40 million as of mid-January 2024, Marti recently launcheda share buyback program, and there may be a lot of potential. One only has to look at the valuations of some of Türkiye’s successful online to offline services businesses including e-commerce giant Trendyol, grocery delivery company Getir and food delivery app Yemeksepeti, for evidence. Trendyol, which is majority-owned byAlibaba Group Holding Ltd. (NYSE: BABA) – China’s leading e-commerce company, which is one of the country’s first decacorns with a valuation of more than $16 billion – while Getir sports a valuation of around $2.5 billion and Yemeksepeti was acquired by Delivery Hero in a $589 million deal. Türkiye is reportedly unique in that local players, not international ones, tend to lead in the market and grow organically through investments and via M&A.
Over the years Alibaba has invested $1.4 billion into Türkiye and plans to invest as much as $2 billion more. Given Türkiye’s strategic location between Europe and Asia, Alibaba sees Türkiye as the perfect pit stop to fuel the e-commerce giant’s expansion in Europe. As a result, it has been investing to build up logistics and data centers in key locations in the country. It’s not just Alibaba that is eyeing Türkiye for expansion. Shein, the fast-fashion brand, recently started manufacturing in Türkiye, and in the fall, Amazon.com Inc. (NASDAQ: AMZN) opened its first logistics center. All of that could fuel the rise of the middle class in Türkiye and the need for rides in cities, which means potentially more business for Marti.
The ride-hailing market seems to be taking off in Türkiye, and Marti seems well-positioned to capitalize. It's already a leading app and has the name recognition of a U.S. listing and the backing of investors in U.S. markets. It doesn’t yet boast the market valuation of its larger rivals in the U.S. and can’t claim decacorn status in Türkiye, but that also indicates room to grow. Marti has the pedal to the metal and plans to stay in the lane for the years to come.
Featured photo by Anna Berdnik on Unsplash.
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