Marti Technologies: Scaling a Mobility Super App & Building Value | Co-Founder & President Cankut - MARTI TECHNOLOGIES INC

Welcome, Jean-Claude Durgan, to the show. How are you doing this morning? I'm doing well. Thanks for having me back, Ben. Great. Glad to have you here. Jean-Aucute is the co-founder and president of Marty Technologies, ticker symbol MRT. We talked to him a couple months ago here for an update. You know, for the benefit of first-time viewers here, there are a lot of viewers. It looks like 2,500 people are watching right now. Before we get into any detailed questions or anything, why don't you just give an overview? we've been telling you guys telling our audience that you're the uber of turkey so uh why don't you just give us an overview about what your company is what you guys do of course yeah so as marta we're turkey's number one urban mobility app across both ios and android app stores we offer multiple services so we have car hailing services motorcycle hailing where a motorcycle driver comes and picks you up, taxi hailing services. And then we have micro-mobility. So we have an owned and operated fleet of e-bikes, e-mopeds, and e-scooters. And then finally, we also launched parcel deliveries in the fourth quarter of last year. So that's the newest service that we have on the platform. We've served over 200 million rides to date uh since the launch of the company in 2019 and we have served those rides to 8.3 million unique consumers we also have 584 000 registered drivers on our ride hailing service so yeah we're uh we are the leading uh tech enabled urban transportation service in turkey turkey has a large market it's 85 million people it's the single largest population in in europe awesome nice uh nice overview um i remember from our first interview a couple things that really stood out for me was um the penetration is still very low compared to what it would be in the states uh sounds like there's a big opportunity there and to get into that town because there's still a lot of people who are just like calling taxis you know just by putting their hands up on the road side of the road right that's right so if you look at the share of trips that taxi trips that are uh done by three means right so one is app-based ride hailing essentially the second is what you mentioned uh hailing a taxi on the street by just sort of raising your hand and the third is by a call center so in turkey we have what are effectively sort of taxi stops where there's multiple across istanbul there's probably like over 100 of them where you call the stop closest to you and they send a car to pick you up. If you look at the taxi sector, less than 30% of trips currently are app based. So what we're competing for in the taxi hailing segment is a share of that less than thirty percent of trips, while the vast majority, you know, the over sort of 70% is either via street hailing or via call center. And there's There's an opportunity, therefore, to not only increase the size of the total taxi hailing pool through the private car and private motorcycle hailing services that we offer, but also to increase the share of taxi trips that are conducted via app-based hailing. And I'm curious about motorcycles. That's something we don't have in the States here. So, like, what percent of the rides are motorcycle versus a car? So right now it's in the 20% range. The motorcycle business is a seasonal business, right? So it performs better in the summers than it does in the winters. But if you look year round, it's at the 15% to 20% of trips are motorcycle hailing trips. But it's a very, if you Look at Southeast Asia, for example, right, and you look at players in those markets, motorcycle haeling trips is actually the majority of their trips. a larger share than car hailing. In the US, for example, I know it doesn't exist. But Turkey is somewhere, it's like a sweet spot in the middle where it is an emerging market. And therefore, you know, traffic, no matter what index you look at, Istanbul is somewhere between number one and number five in terms of most trafficked cities in the world. And traffic is an issue in cities across the country and then in emerging markets you also i believe need a lower price point solution as well right in terms of purchasing power uh not everybody of course is able to afford a car hailing trip and therefore turkey is in that sweet spot where motorcycle hailing is a thing but uh it is uh not as prevalent in turkey as in some southeast asian markets while being much more prevalent and existent relative to Western markets. Okay. You mentioned you recently launched Parcel Delivery. Can you tell us a little bit more about that? And does that include food delivery from restaurants? How does that work? That's right. So we launched Parcell Deliveries. And what we mean by that is you can go into our app, and just like you hail a car or a motorcycle driver, you can request that that motorcycle or car driver come to a specific location, pick up a parcel, and deliver it to any location where you would like. So theoretically, you're right, Ben, right? You could use this for food delivery, right, you could get a driver to go to a merchant to go to your favorite restaurant, pickup some food, and then deliver it your location. But it isn't limited to food delivery. It also is much broader than that, right. You're able to send documents from one business to another uh if you uh left your passport or you know an id card at home on the way to somewhere you're able to get that and you have somebody at home who could give that to the delivery person then you'reable to sort of get that delivered as well it's a much broader offering but what the reason we're we introduced delivery services in the form of parcels is in order to create greater utilization for our car hailing and our motorcycle hailing drivers. If you look at these drivers, there is still significant, significant upside remaining in terms of ride hailing demand. And therefore we said, you know, in their idle time, our drivers, rather than waiting for a ride haaling trip, should be able to earn money in some other way. That was the reason why we introduced the service. Now that we have started to build demand for a delivery service we do have plans to go back to the supply side effectively and start onboarding merchants so not have just a parcel delivery service in which you could have merchant-based delivery as well as the other forms of delivery that i mentioned but also expand into you know having a merchant together with their product listings okay which makes it much more convenient of course to sort of order food like so for right now the customer would have to specify kind of right out like what package you're picking up or what meal they're picking up right but so it's not but in the future you're saying there'll be product listings exactly so right now you have to say you haveと say go to this restaurant and get me this specific burrito uh whereas you don't have a menu listing but right right right you have plans to add that okay all right what's the timeline for adding it uh we're actively working on it okay and i'm curious lots of curveball questions i didn't intend on asking you but they're just come into mind when you mentioned mentioned the parcel delivery um what what how do you see the tam of the let's say the the uber eats equivalent the restaurant part versus what you're doing now um how big is that versus the the ride hailing yeah so we believe that the parcel livery market in turkey represents roughly 400 million dollars of annual revenue potential so this is this is the revenue potential to the enabling marketplace not the value of the total sort of uh deliveries not the gmv but the marketplace okay which relative to ride hailing which we estimate to have an annual revenue potential sort of in excess of three billion dollars oh wow so it is it is a much smaller it is much smaller share i do believe that the the broader delivery opportunity so once you start integrating merchant listings and merchant product listings specifically that opportunity is in terms of size it is going to be closer to the opportunity in the ride hailing revenue potential cool wow sounds good all right let's dig into a couple of recent press releases you had here uh well maybe one of them is not so recent but recent for us since we last spoke to On September 3rd, you had ride-hailing targets hit a month early, 4.9 million all-time unique riders. Why don't you tell us about how you reached that target and how things have been going since then and kind of what that means for you, these milestones that you hit? Yeah, so we announce quarterly targets for our ride-hailing riders as well as drivers. And we have hit all of the targets that we have set for the company across those dimensions. in our first sort of three-plus years of launching the ride-hailing service. This was the first time, however, where we hit the targets. I believe it was a month earlier, so we hit the September 30 targets in early September. And the main reason for that was that the way we set the targets is that we look at each of the cities where we operate, and we have a growth curve in terms of both rider and driver acquisition, as well as the engagement of those riders and drivers on a cohort basis in order to sort of bottom up, come up with those target numbers. And what we've seen is that many of the newer cities that we launched. So to take a step back, we launched our ride hailing service in October 2022 in Istanbul. We added Ankara, the capital of Turkey, Izmit on the Aegean coast and Antalya on the Mediterranean coast within a few months of the Istanbul launch. And then it was only in late 2025 that we added 16 new cities. And it was less than six months ago when we added an additional 10, such that we currently serve 30 cities. What we're seeing is that especially the new city launches that we have done over the last year, year and a half, those are somewhat counterintuitively, right? Because these are smaller and less dense cities than Istanbul, for example, they're actually growing at a much faster pace than the earlier city launches at the same time, you know, in 2022 and 2023. And the explanation that we have for that is that on one end, you would guess that sort of tech enabled urban transportation is a bigger opportunity in larger cities, right? If you think about international ride hailing firms and the share of their trips that comes from, you know, a metropolis like New York or Beijing or, you know, similarly scaled cities. While that's an opportunity, what's somewhat different in Turkey is that the availability of tech-enabled transportation solutions and the availability of any transportation solution, for that matter, is less in the non-metropolises than it is in the largest cities so what you're doing is actually you're creating a transportation solution in an environment where there's no metro right to compete with there's even more limited taxi penetration than there is in istanbul istanbul is one of the least penetrated cities metropolis is globally in terms of taxi hailing per population but in the newer city launches that we have have taxis are even less penetrated, and then alternative forms of transportation are also less prevalent. And that, I think, is the reason why we're actually seeing faster growth and therefore hitting our targets earlier because of the growth coming from outside of Istanbul specifically. Okay. Let's talk about what that growth means for your financials. Right now, in the market, as I'm sure you're aware, underneath the major indices, which are still doing okay. Smaller companies, especially those that are not profitable yet or might need access to debt, have just gotten absolutely demolished because of high interest rates, right? So I see here in Q2, you actually had your first profitable quarter on an adjusted EBITDA basis. So this growth that you're achieving now recently, how's that going to translate into profitability? When we go from Q2 to Q3, does this growth, is that goingto translate into more profitability or do have to spend more money to get this growth. How's that looking for you? Yeah. So in the second quarter, we finished the second quarter with $20 million of net revenue, 77% gross profit margin, and $2.9 million of positive adjusted EBITDA. It was the first quarter where, at the company level, we achieved positive adjusted EBITda. Our guidance for the year was for $85 million of net revenue and $7 million of adjusted EBITDA. So we're also a business that is growing its volume of trips sort of 70% plus year over year. So if you think about that type of volume growth, right, what that would suggest is that, you know, given that we've hit close to quarter of our year round net revenue forecast in the second quarter in a business that's growing volumes 70% plus year over year, we are all well on track to achieve the $85 million net revenue forecast that we've set for the year. What we did not anticipate is from an adjusted EBITDA perspective, right? For the year, $7 million of adjusted EBitda on $85 billion of net revenue, that translates into roughly, I think it's like an 8% or so adjusted EBITDA margin. We actually achieved a 15% adjusted EBitDA margin in the second quarter, right? $2.9 million on $20 million of net revenue. And that's primarily driven by the faster top line growth than we had originally anticipated. Some of the reasons which we touched upon, the growth in the cities outside of Istanbul. It's also driven by the very steep increase that we've seen in our gross margin. So if you look at our gross margin, which was 77% in the second quarter, that number was 57% a year ago. So it's gone up by 20 percentage points. And the reason it's gone up and the reason that's structurally very high, right? We are an online to offline business at the end of the day. So a 77% gross margin, it's more like SaaS-like, at least SaaS pre-AI like gross margins. And there's structural reasons for this. The first is that we're operating in Turkey. Turkey has a lower cost structure than other international ride-hailing markets in many of the human labor-driven variable costs that go into the cost of revenue. So if you think of driver onboarding costs, if you think of call center, customer service teams, city launch teams, and so forth, those variable costs, they're much lower in Turkey. The second reason is that insurance premiums in Turkey are much lower than in many other markets. Insurance premiums, they eat up to double digit percentage points into the margins of international ride hailing firms. And the insurance sector is much more nascent in Turkey, The legal liability system is different. And as a result, we have much lower insurance premiums because of those structural advantages. That's the reason why we're actually seeing the growth in net revenue that continues and is continuing in the third quarter as well. Flowing through to positive just at EBITDA at a faster pace than we had originally anticipated. We're going to be announcing our third quarter results the week of November 9. So we'll be able to track the continued performance across those metrics then. Nice, in about three weeks. So how's that dropping down to the bottom, bottom line, right? Cash flow. And how's dat look in terms of cash flow and cash you have on hand? I see we'll talk about you have a buyback going on. So it seems to imply you have excess cash to do buybacks. But, again, we're trying to drill down to this question of, because there could be a great opportunity for investors. Obviously, we'RE not telling anyone to buy your stock or whatnot, right? That's your own decision. So, but, you know, right now, again as I mentioned, the market's really punishing small companies, any company they think is not profitable yet. So they may be throwing the baby out with the bathwater. So there could Be really good opportunities on specific stocks if they can show that we don't need to raise money. You know, that's it. Like if you can get get through to the other side and get the profitability, you don't need to raise money. That's a huge, huge benefit. Are you in that position yet? What's your situation with cash? So we are a business that we are not free cash flow positive yet. We set a target for being adjusted even positive in 2026. We've already achieved that as of the second quarter. But looking forward. Right. this is a business that historically has grown the top line over 2x year over year for two to three years now. So the $85 million net revenue forecast that we have for this year, for example, is more than twice as large as the figure from last year. And that figure from the last year was more than once as large than the figure for the year before. I don't see any change to that trend moving forward in the short term right and the reason is that from a volume what is our revenue made up right it's made up of the number of trips that we complete that we enable over our platform and the revenue per trip and so if you look at both of those metrics from a volume of trips perspective i believe that we have at least 10x more upside in terms of increasing penetration levels within our existing cities as well as potentially launching a few more other cities from a pricing perspective if you look at our effective take rate so differently than internet many international ride hailing firms that monetize via a commission basis where you know the rider pays the driver affair and the marketplace enabling that transaction takes a cut of that fair we monetize by subscription packages so we have a subscription package that riders, drivers can sign up for in order to have the right to complete rides on our platform. But if you look at our effective take rate, I call it effective take great because we're monetizing not by our commissions, but by the subscription packages. But the way we define that is the revenue of the company divided by the total value of fares that we enable over our platform. That number is in the mid-teens right now. If you compare that to international ride hailing firms, they're operating with 30% plus take rates. So not only do we have 10x plus upside from a volume of trips perspective relative to what the market's going to look like as steady state, but we also have 2x plus outside from a monetization perspective. And as long as we have those levers available to us, I do foresee our revenue continuing to grow 2x Plus year over year. If you take $85 million of revenue forecast for this year, you double that. You continue to apply a gross margin. Let's say you continue to supply the 77% gross margin that we had in the second quarter of this year. and then you assume that sales and marketing and fixed costs and so forth stay similar and that is a pretty safe assumption most of our growth over the in terms of product features and capabilities over the last two three years uh it's largely been ai driven so rather than we haven't let go of people but we also haven't increased the size of our team right our team has been fairly stable over the last two, three years, the increase in our capabilities and the product features that we have available, the decrease in our marketing team's outputs, a lot of that is just by leveraging AI tools right now. So if you continue to assume that the sales and marketing and the fixed costs remain similar, then you can do the math, right, on sort of $85 million of revenue in 2026, doubling year over year, continuing to operate with a 77%, 80% gross margin. And the sales and marketing and fixed costs in 2027 that we have announced in our EBITDA guidance, it's roughly $40 to $50 million. And if you assume that continues to remain the same in 2028, we should be able to reach free cash flow profitability in 2029. Oh, I love that. I love that answer. You really walked through financial model a little bit there. For people who would like to do that and build financial models, you can take that commentary, put it in your AI, look at the finances of the company so far. That was a really helpful commentary. I appreciate that, Jankuth. So that takes us to this buyback question, right? It sounds like you feel confident or the board at least feels confident that you're heading in the right direction and that the shares are cheap here. So let me just pull up your stock price here, MRT, we're at $1.82. So can you tell us a little bit about this decision to increase the share buyback from $2.5 million to $5 million? Yep. So buybacks are just one instrument inside our broader capital allocation strategy. And they are a small one, right? So our primary focus for a business that we believe has 10x upside in terms of volumes, 2x upside in terms of pricing, the focus is growth. There should be no doubt about that. That is where what we are thinking about. That is what most of our resources are going towards. However, I also do think that we have a unique setup where because we are effectively operating as the largest at-scale ride-hailing firm in Turkey right now, we don't face the same trade-off between profitability and growth that many other international firms faced in more competitive ride-hailing markets earlier on in their life cycles, right? Because we don't face that trade-offs between profitability growth, we can continue to be focused on growth while also achieving the adjusted EBITDA profitability that we have this year while also having targets for free cash flow profitability. And what that means is that it makes sense to, while focusing on growth, also use the opportunity if we believe that the stock is undervalued to allocate a small fraction of our capital, right? Two and a half million dollars increased to five million dollars just to put sort of a bit more numbers on that, right. So the pace of our buyback strategy right now is actually constrained by not only the share price, but also the number of shares that we can buy. So according to the SEC safe harbor regulations, there's a cap on how many shares we can Buy on a daily basis, we are currently and that cap is a function of your average trading volume, I believe it's your average daily trading volume over the last four weeks. So what we do is we buy as aggressively as we can, in light of that cap. But if you look at our current share price, and you look at the amount of shares that we're buying, which is as aggressive as possible within that cap, we're spending about $400,000, $500,000 a month on the buyback. And therefore we said, well, the original buyback was scheduled to end at the end of October. And we said we want to extend that for six more months. So we extended it from the end of October through the end of April, 2027. And assuming we continue at our current pace, where we buy $400,000 or $500,000 worth of shares on a monthly basis, that was the reason why we increased the size of the program from $2.5 million to $5 million in those additional six months in order to enable that. Nice. Fascinating. Market cap, by the way, According to Webull here, it's $157 million. We started a little bit late, so let me, if you don't mind, do you have a couple of minutes to go? I do. I'm available. It's totally my fault. I don't know why we weren't able to get the audio on time. So I apologize. So, man, for me, personally, this begs the question, because, man. I heard some really good things here in terms of your growth and the path to profitability. What's the end game here for Marty? Are you looking to stay independent? I'm just curious because is this something like an Uber is looked at? You know, it sounds like you're the leader in Turkey, right? Correct me if I'm wrong. But is there an end game here where you'd sell to Uber for, I don't know, $10, $15, $20 a share in a couple of years? Or what is your goal here and the board's goal here with the company? We took the company public very early on. we had yet to complete our four-year anniversary when the company and part of the reason why we did that is because we wanted to remain independent for you know as long as possible and in the case of turkia right like venture capital funding as well as subsequent sort of larger financing rounds they're not as readily available as for example in the u.s market and therefore having access to capital also having the ability to for our earlier shareholders right who want and have different liquidity profiles than we do as the founders giving the opportunity for them to have that liquidity available should they choose to pursue it that was the one of the main reasons why we took the company public very early on uh now that we have given that opportunity for liquidity to our uh to all our shareholder base you know as the founders we want to continue running this business right i'm 40 years old i don't feel 40 i feel younger my partners they're younger uh they're in their 30s on one hand yes it's been we launched the company in 2019 so it's been coming up on eight years since we've been running it it's actually the longest single company that I've worked on prior to this. I co-founded two Venture Capital funds and I ran them for about five years each. This is the first time it's been eight years. So it's been longer than the previous captures, but we want to take this to what the eventual potential of this is. Which is what? The eventual potential of this is not only the upside that I mentioned in ride hailing, right? I believe the steady state market is going to have 10 times as many trips and it's going to have 2x upside in terms of pricing. But there's also opportunities we talked about the opportunities in deliveries the opportunities to expand parcel deliveries into broader more convenient forms of deliveries from a consumer perspective. You also have the opportunity to expand into financial services. So if you look at what we have is we have a wallet in place where you can upload cash. And currently, you're able to do two things with that cash. You're able to use it towards services on the MARTA platform, whether that's our ride-hailing, micro-mobility delivery services, or you're able to transfer it peer-to-peer to other MARTA users. That is a closed-loop financial service. What I mean by closed-loop is that you can use it within the MARta platform, right? You can use it for a MARTA service or to transfer it to another MARTA user. There's an opportunity to make this open loop, right? There's an opportunity for you to use for the 8.3 million consumers that use our app to use this to buy services outside of the MARTA platform and to use this to transfer money to anybody, right. It's a playbook that has been applied by mobility super apps like ourselves in other markets. And it's a big opportunity for us. We're going to continue and pursue each of those opportunities. So, but just the, that's a future opportunity, but just in your core business now, you're talking about 10 times more rides, two times pricing. Am I right in saying, are you guys targeting like 1.5 billion plus in annual revenue from your core? The ride hailing market in Turkey alone, we believe is a $3 billion plus annual revenue opportunity. Okay, cool. Nice. All right, John Coot, appreciate all of that information. That was really fascinating. A lot to dig into for folks who might be interested. And just for clarity, if I didn't say it up front, Marty is a sponsor of this program here today. So appreciate your time. Stick around on the other side. We're going to continue live trading. Thank you, Marty. Again, it's ticker symbol MRT if you want to look it up and do some research. Thank You. Thanks for having us, Ben. Take care.