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An overview of the startups in Bangladesh

  • Published at 12:59 pm July 26th, 2021
Ride sharing
Photo: Syed Zakir Hossain/Dhaka Tribune

Many startups compete with each other locally and internationally, but what becomes of them when they enter the local markets like Bangladesh?

Over the last decade, the word startups have been on everyone’s lips. But what exactly are they? Startups are companies that are built on a scalable model that began to mushroom all over the United States around 2010. 

Many startups compete with each other locally and internationally, but what becomes of them when they enter the local markets like Bangladesh?

Built on similar models, here is a take on what the startup ecosystem has been like in Bangladesh these past few years. 

Food delivery 

In 2008, Zomato was founded in India, serving as a restaurant discovery service. By 2015, with more and more food delivery services emerging, Zomato cashed in on the opportunity and soon gained more popularity as one of the many reliable delivery services.

Foodpanda, another famous name in the industry, began its journey in Singapore in the year 2012. Foodpanda is a food and grocery delivery platform owned by Delivery Hero, a company based in Berlin, Germany and has 20 brands operating in about 50 countries on four continents. 

In December 2016, Delivery Hero purchased the Foodpanda brand, which was previously utilized in Asia, Bulgaria, and Romania. Foodpanda is Asia's largest food and grocery delivery platform at the moment.

In December 2013, Foodpanda began operations in Bangladesh, with its service available in Dhaka. Since its inception, Foodpanda has aimed to be a leader in the digitization of consumer behaviour and the growth of the local restaurant business. Currently, Foodpanda is available in 64 districts across Bangladesh.

Despite some strong competition in the market such as HungryNaki - the first of its kind to arrive to the Bangladeshi market, Pathao Food and Shohoz Food, Foodpanda continues to be a go-to name, especially during the pandemic. 

On the other hand, UberEats is the most popular food delivery service, with 66 million customers worldwide. It is available in 6,000 locations and supports 600,000 restaurants. 

Uber Eats made $4.8 billion in sales in 2020, thanks to a 30% increase in customers during the pandemic in March. However, its reign on the Bangladeshi market was short-lived. Launching here in April 2019, UberEats Bangladesh was off to a strong start, owing to the large funds they had to back up operations. 

By May 2020, however, they had announced the end of their operations in the country; despite the funds, the popularity of existing food delivery services was something that UberEats could not beat, with Pathao Food and Foodpanda leading the market.

Ride sharing

Uber, based in the United States, includes ride-hailing, food delivery (UberEats), package delivery, couriers, freight transportation, and electric bicycle and motorized scooter rental through a collaboration with Lime. 

The company is based in San Francisco and has offices in over 900 places throughout the world. It is one of the most well-known gig economy businesses.

Uber is projected to have around 93 million monthly active users worldwide. It has a 71% market share in ride-sharing, with around 3.5 million drivers providing services, and a 22% market share in food delivery in the United States. 

Uber has become so dominant in the sharing economy that the term “uberisation” has been coined to describe developments in numerous industries as a result of Uber.

Uber launched its ride-sharing services in Bangladesh in 2016, coming in as a strong competition to Pathao, established just a year earlier. 

According to reports, by the end of 2020, Uber had served 40 lakh people in the country, with over 1.75 lakh local drivers being employed across Bangladesh. 

Pathao, on the other hand, began its journey in Bangladesh in 2015 as a delivery business using motorbikes and bicycles. They served as a delivery service for a number of Bangladeshi e-commerce businesses. 

Pathao began bike-sharing services in mid-2016 and by March 2018 it had successfully signed up over 100,000 drivers and roughly 1 million riders around the country. 

Pathao CEO Hussain M Elius said in an interview with TechCrunch that the company has over 50,000 motorcycles registered on its platform and is valued at over $100 million as of April 2018. 

Pathao’s services quickly gained popularity amongst the citizens of Bangladesh, mainly owing to the relatively cheaper fares, and the wide availability of bikes - a faster and cheaper option for the majority of the population.

Vacation homes

Airbnb is a platform that allows hosts to provide short-term housing and tourism-related activities to their guests. 

Guests can search for different categories of accommodations, such as bed and breakfasts, unique homes, and vacation homes, using filters such as lodging type, dates, location, and price. 

It was founded in 2007 and is based in San Francisco. Airbnb does not own any of the houses advertised. Instead, it makes money from commissions on each booking.

Since 2007, Airbnb's user base has grown to over 220 countries, with over 150 million people booking over 800 million nights. There are active Airbnb listings in at least 100,000 cities.

Inspired by Airbnb, Chaya app is Bangladesh's first space sharing marketplace. It was launched in October 2019 with the goal of connecting space owners with users. 

Unoccupied and unused spaces can be listed by their owners on the Chaya’s website, for users to peruse and through and find what they need.

Chaya has received over 100 bookings from users in the last three months, despite the pandemic. 

They charge a 15% commission from each booking, similar to Airbnb. In exchange, they help to market the space and provide services to make it easier and more accessible to potential renters.

Grocery shopping

Grocery delivery services can be traced back to Instacart, founded in 2012 in the United States and Canada. 

It runs a grocery delivery and pick-up service. The company's services are available through a website and a mobile app. Customers can order groceries from partnering merchants and have a personal shopper conduct the shopping for them. 

In addition to groceries, Instacart provides pharmaceuticals and alcohol if consumers show their identification at the time of delivery.

Instacart is believed to have 9.6 million active users and over 500,000 shoppers who utilize the service to pick up things. In 2020, they reportedly made $1.5 billion in revenue, with $35 billion in sales. Instacart also had its first profitable month during the coronavirus outbreak, earning $10 million.

Chaldal.com, founded in 2013, is a Bangladeshi online grocery and food products retailer. Its website and mobile app sell fresh fruits and vegetables, meat and dairy, groceries, personal care, and household supplies. Chaldal operates and provides services in Dhaka, Narayanganj, Chittagong, and, most recently, Jessore.

Starting off with just one warehouse/office in Gulshan, Dhaka while offering next day delivery, Chaldal.com currently has a total of 25 active warehouses that are open 24 hours a day, seven days a week to provide the finest service possible. 

Chaldal allows customers to pick their preferred delivery hours. It now distributes over 10,000 orders per day and serves almost 20,000 households in Bangladesh. Its current yearly revenue is believed to be $54.9 million.

Over the course of last year, more and more platforms have begun providing grocery delivery services during the pandemic to limit the need to go out, such as with the launch of pandamart by Foodpanda, as well as popular shops like Shwapno offering delivery services to select areas. Some new names like Ene Dao have also emerged, who source products to deliver what the customers need to their doorsteps.

Mobile banking

PayPal Holdings, Inc - an American firm that operates an online payments system in the majority of nations that allow for online money transfers -- serves as an electronic alternative to traditional paper methods like cheques and money orders. 

It was founded in 1998, but went public in 2002, with a market capitalization of $1.5 billion. PayPal has 377 million active, registered accounts as of 2021, and it operates in 202 markets. PayPal allows users to transfer, receive, and store money in 25 different currencies all over the world.

However, Paypal is not legally recognized in Bangladesh. As an alternative, Bangladeshis use Bkash which is a bank-led mobile financial service provider in Bangladesh that works under the Central Bank's license and authorization (Bangladesh Bank). 

Bkash provides both unbanked and banked Bangladeshis with a secure, convenient, and simple way to make payments and money transfers using their mobile phones.

Bkash started operations in Bangladesh in July 2011 with three basic services: cash in, cash out, and send money, bearing in mind that more than 70% of Bangladesh's population resides in rural areas where traditional banking services are difficult to come by.

Over the course of its existence, services such as bill payment and train-movie ticket purchase were launched. Bkash currently has a network of over 200,000 agents in Bangladesh's urban and rural areas, with over 50 million verified accounts. According to Fortune, bKash is used by 22% of Bangladeshi people, with 4.5 million daily transactions.

Again, since the pandemic hit, digital payments and mobile banking have seen an increase in demand, with most food delivery, grocery shopping as well as ride sharing services enabling the option to pay via Bkash.

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