By the end of 2016, BelkaCar had up to 300 orders a day, with users spending an average of three to four hours with the cars. The price to use them is eight roubles per minute ($0.13), which generates a daily revenue of around 500,000 roubles ($8,435). SECRETMAG reveals how these three close friends manage to do business together without arguing.
Ekaterina Makarova, Loriana Sardar and Elena Muradova are all very different. Sardar, a beautiful brunette, speaks about the service the most, mentioning lots of figures. Makarova plays the role of a big boss and she often interrupts to clarify something, make a joke or use strong language.
Sardar and Makarova met almost ten years ago at the University of California while studying for their MBAs. After graduating, Makarova worked in marketing and business development in the Moscow office of American company Borland. Sardar went to Milan and worked at BMT Private Equity while Muradova was engaged in clothing production with the fashion brand Classic Style.
It was in Italy where the future entrepreneurs learned about the existence of carsharing. In Milan, there were 1,200 cars in service in 2013. Sardar was surprised when she noted that her friends had just one car per family and actively used rentals. Sardar registered with the local car2go but the idea of carsharing as a business opportunity in Moscow came later and not to her either.
A Midnight Enlightenment
At the end of October 2013, Ekaterina Makarova was at a lecture at the Skolkovo Business School. She doesn't remember who was giving the lecture and what it was about, only that a presentation of the Startup Academy stuck in her memory.
"I wasn't going to study there," Makarova said, but she was convinced to take a loan from Gazprombank to studу. All the students except for Makarova already had projects and she had to think of something as well.
Once, while visiting Muradova after a lecture, the friends discussed her studies and other matters at the kitchen table. They then called Sardar, who began to praise Milan's carsharing once again and Makarova had her idea.
A Three-Woman Startup
Ekaterina Makarova presented a rough business model at the Startup Academy but no one at Skolkovo seemed very impressed. Other students had developed services that didn't require any serious investment. However, the three friends were unstoppable.
Makarova continued going to work, attending some classes and she managed to find time to study the work of successful carsharing services.
Sardar even decided to move to Moscow within a year and a half to make their dream a reality. However, their families were so against their business idea that Makarova hid the startup from her family, with her father only learning about BelkaCar from a TV program devoted to its launch.
Since no one in Russia understood anything about carsharing and the women didn't want to fail, they invited Julian Espiritu, founder of ZipCar, an American carsharing service, to come and consult with them. Espiritu proved to be an enthusiastic but expensive expert: the consultations alone cost $60,000 and the businesswomen spent not only their own money but also borrowed from relatives and took out loans.
At a Low Point
"Сar ... what?" This question was asked by Moscow's Department of Transport. The women and Espiritu attended meetings in which they tried to persuade officials to allow them not to have to pay for parking shared cars, and in the end they succeeded.
It took 11 months for the city to enact the appropriate legislation and to get the necessary government regulations. The entrepreneurs failed to get carsharing-only lanes but they didn't lose hope. By December 2015, their team had expanded to six people.
The women had to look for specialists in other cities and move them to Moscow because Muscovites, as Makarova explained, were "overfed" and asked for huge salaries even if they knew nothing about the business.
Down to the Last Kopecks
The launch of the project was still nowhere in sight but the money had run out. "At first, it was awkward to call friends and ask for help but we got over it quickly," they recalled.
They knew exactly what kind of investor they needed – a strategic one, preferably from the West. Yet their endless negotiations didn't show any results. "After the hundredth meeting, I stopped counting," Sardar said.
As a result, the money finally ran out in the spring of 2016 and Sardar decided to ask Dmitry Zimin, founder of VimpelCom, and also BMT Private Equity, the company Sardar had worked for in Milan, for help. Zimin didn't invest but he instead offered 250,000 euros as a loan.
By the summer of 2016, there were already four carsharing services in Moscow and BelkaCar was still trying to get off the ground.
In August 2016, Ekaterina Makarova received a phone call from an unknown number. Hearing something about investing, she handed the phone to Loriana Sardar and said, "Here, this is another investor." The phone call turned out to be the Swiss fund Bryanston offering them a meeting.
During a meeting with an investment manager and analyst from Bryanston, BelkaCar's founders were relaxed because they thought it wouldn't succeed.
Nevertheless, the analyst called back the same day and offered money on terms that were better than anything else before. They agreed immediately to the deal and in September 2016, they signed a contract with Bryanston, who then invested 2.1 million euros into the company in November.
Pimp My Ride
For the whole night of Oct. 21, ten employees from BelkaCar covered a hundred dark blue Kia Rio hatchbacks with bright orange film. The founders then drove them to the parking lot by themselves.
According to Sardar, BelkaCar's performance in the first month achieved the level that their competitors had only reached after several months.
The most stressful thing though isn't competition but badly-behaving clients. Sardar once came home from the office and burst into tears after another charger was torn out from yet another car. And that's far from the worst: people spend nights in the cars, try to steal them, transport pets without carrier bags and, of course, get into accidents.
Such customers get blacklisted, fined and, in the case of an accident, charged 30,000 roubles ($506.20) and 15% of the cost of repairs if the damage is serious. The average operating cost per vehicle is 35,000 roubles per month ($590.50).
BelkaCar is planning to develop their service not only for individuals but for companies as well. There are seven contracts signed already in which the company agrees to buy a permanent carsharing ticket for its employees.
Sardar says that the hardest part of the business is not giving up on their customers and themselves. "We are like a family — we can be offended sometimes but we still understand that we won't let each other down," concluded Muradova and Makarova.