Productivity the mantra for survival in Sri Lanka: PickMe Chairman

PickMe Chairman Ajit Gunewardene

The way to look at this is the whole aspect of technology into the economy — how the economy can get supercharged with technology. We speak about Sri Lanka now, because that’s where our focus is. But if you look at the rest of the world, this is something that has already happened. Technology has changed everything. And frankly, we are backward, and that’s a huge opportunity

Following PickMe’s announcement of its forthcoming IPO, Chairman Ajit Gunewardene speaks about the company’s expansion and potential. “Moving forward, we should remain focused on our core areas of involvement. Despite being highly profitable and cash generative, we are only scratching the surface of our potential. Our expansion into additional verticals, of which we are already active, holds great promise,” he says. Following are excerpts:

Q: Let’s start with the IPO you are going in for. One might think an IPO is highly overdue for a company doing as well as PickMe. Are you trying to raise money in the market for expansion?

No, we are not raising money in the market for the company. There is no need for us to do that. The company is generating adequate cash for its own investment needs. The real purpose of the IPO is that it has been 10 years since our inception and we have had several investors who have supported the company over those 10 years. It is therefore, a liquidity event that has been created; basically what that means is, we are enabling our investors to monetise the investments they have made for the company over the years.

The other aspect of it is, it enables other investors to now participate in the company’s growth. We are very comfortable operating within the governance standards of a public company, especially since that is what we have done anyway from PickMe’s inception. 

Our cap table, which is available to be seen in the prospectus, will show the type of investors we’ve had up to now. We have had enlightened, sophisticated, and very supportive investors who understood the risks when they initially invested in what was then a startup. They also understood the potential and growth of this entity, also in the subsequent capital raisers. Most of them will continue to hold their investments. In fact, virtually all of them have held on to their investments, but it is time now for us to create this liquidity event so that going forward, all current investors can also participate in the future growth of the company.

Q: What type of digital company is PickMe? Can you explain in detail?

So fundamentally it is a company that creates through digitisation, technology, software, efficiency and productivity. That is what it is. And what we do right now in this instance, and what we have done up to date, is create productivity and efficiency in mobility. 

We chose mobility as our core proposition, because in Sri Lanka, there was a significant level of inefficiency in mobility that could be made efficient through digitisation.

From a business perspective, productivity is going to be the mantra for survival in Sri Lanka. And that is what technology does; it brings you productivity and it brings you efficiency. Looking at our macro environment, Sri Lanka’s GDP, population and the size of our economy, there are only a few areas with scale. One such is Financial Services and another is Food. Everyone requires food and financial services in some form or the other. The next is mobility. Everyone has to get from point A to B at some time, and most often it is daily.

So, from a business perspective, taking on an area of scale in an economy like ours makes imminent sense. That is why we are playing in this environment at this point in time.

Q: So from this point on, what is your scope for expansion? 

 The way to look at this is the whole aspect of technology into the economy — how the economy can get supercharged with technology. We speak about Sri Lanka now, because that’s where our focus is. But if you look at the rest of the world, this is something that has already happened. Technology has changed everything. And frankly, we are backward, and that’s a huge opportunity.

Moving forward, we should remain focused on our core areas of involvement. Despite being highly profitable and cash generative, we are only scratching the surface of our potential. Our expansion into additional verticals, of which we are already active, holds great promise. 

As we deepen our market penetration, the intellectual property we generate will become increasingly valuable. We will leverage this intellectual property to introduce new services via our existing platform, which is already widely used. While it’s too early to disclose specifics, this approach will be a key driver of future growth. Our asset is our intellectual property, which is our knowledge. This is entrenched into the organisation, in our exceptional team.

In addition to expanding within our current sectors, this strategy will unlock new avenues for development, ensuring sustained growth and maximising our potential.

Q: There has been a clamp down on vehicle imports in the last 4-5 years. How does that impact your industry?

 It doesn’t particularly impact us; in fact, it presents a potential opportunity. We believe technology acts as a great leveller, democratising access to services. Why own a vehicle when technology can optimise resource use for individuals, companies, and the entire country? 

Instead of owning a vehicle, which involves productivity, efficiency, and resource utilisation concerns, why not make the most of existing resources? Whether it’s transporting goods, taking children to school, or simply travelling from point A to point B, why own a vehicle and drive it yourself? Pay-as-you-go services are productive and efficient. Technology can seamlessly connect these services, creating an effective, productive and an efficient system. 

Q: So, you’re saying solutions that PickMe and all these other ride-hailing companies use are making our transport sector more efficient? And by default, the fact that Sri Lanka has clamped down on imports is a good thing?

I wouldn’t say it’s a good thing. It’s simply that we look at everything that has happened as an opportunity and we will have the same view going forward. We can’t have a country that is not going to allow vehicle imports. So, that doesn’t matter, because ultimately, individuals and companies are going to decide. Do they want to have additional cost and weight on their balance sheets, or are they going to do things more effectively and efficiently?

Q: From personal experience, it is almost impossible to get a taxi, on whichever platform during morning hours. So, there’s obviously, huge opportunity in the market for expansion. What do you have to say about that?

 Absolutely. Our goal is to achieve deeper market penetration. This means ensuring an adequate supply at all times to guarantee reliability and consistency, 24/7, 365 days a year. This principle applies across all our verticals, regardless of conditions.

There is still much work to be done, which is why we say we haven’t reached saturation. We are committed to continuous improvement and expansion to meet these standards.

Q: So, there is so much more growth an investor can expect from this company?

 We envision the future from two perspectives. First, there’s the deeper integration into the economy, extending beyond mobility. Our vision encompasses both mobility and areas beyond it. As a technology company, we are heavily invested in research, development, and the creation of intellectual property.

The second perspective is the transformative power of technology itself. Consider how much the world and Sri Lanka have evolved over the past 20 to 30 years in terms of business operations. Even within the last decade, since PickMe’s inception, we’ve witnessed significant technological advancements reshaping our industry. Technology now plays a dominant role in transforming every aspect of our lives.

Now we can talk about the buzzwords of AI and most would understand it. At PickMe, we are at the forefront of these changes. Our team of specialists is deeply engaged in cutting-edge technologies, including AI. We understand the science and how to apply it in our operations. Looking ahead, we recognise that the way we do business in the next 10 years will be vastly different from today. Technology companies like ours will lead the charge in this transformation. We represent the digital economy. We are the next frontier.

Q: I’d like to talk about the macro environment for investment. But before that… Would you say PickMe is the only company of scale in Sri Lanka in the digital arena?

 To my knowledge, this is the only digital-only consumer technology business in Sri Lanka that has achieved such milestones. Starting from zero, it was just an idea from a founder. The company raised money, moved past the proof of concept stage, entered production, and successfully penetrated the market. After several rounds of capital raising and investments, it has now reached a point of maturity and is being listed.

From its inception as a startup to its current status, this journey is unparalleled. As a technology company of scale developed in Sri Lanka and centred on the Sri Lankan market, I can’t think of another company that has accomplished this.

Q: The macro environment for investment, do you think this is the right time? We are coming towards elections and all that entails?

 There is never a perfect time. We can’t choose our timing; we just recognize that this is our time. I’ve discussed why a digital company is relevant in the current economic context. While there are external factors, such as macroeconomic conditions and political developments, that can influence market sentiment and investment decisions, these are short-term impacts.

We focus on the long-term potential and scope of our company. We evaluate what we’ve achieved, our level of maturity, and where we can go in the next three, five, or ten years. This long-term perspective is crucial for understanding the soundness and potential of any organisation, especially for serious investors.

Q: So, this may not be the time for the punter in the market?

 Maybe it is. What I mean is, the pricing and valuation are clearly linked to the markets right? So, perhaps it is also the time for the punter.