In an exclusive interview with the president of Pathao Fahim Ahmed, Dhaka Tribune's Zisan Bin Liaquat finds out more about him breaking barriers and the future of Bangladesh’s first breakout startup
What do you think are the biggest challenges for startups in Bangladesh?
The single biggest challenge – and the reason for a startup’s very existence – is to solve problems at scale. A startup is at its best when it delivers solutions for previously insurmountable problems. The mission of a startup is to create opportunities where there are challenges and bring about massive impact beyond affecting the lives of just a few.
How does Pathao overcome the challenges?
Pathao was conceived with the idea of solving problems for our users. Before Pathao came in, people couldn’t move around very easily because of the traffic congestion.
What we did was to provide a solution that was fast, affordable and efficient. We cut travel time by half, travel costs by half.
We instilled the confidence in consumers to purchase a service online. We also created a culture that allowed people to turn a motorbike into an income source in addition to a means for the commute.
We catalyzed the adoption of technology by users. We have long understood that ensuring customer satisfaction, rather than competing on price, is key to achieving sustainability. We did exactly that with an obsessive focus on quality.
We also heavily invested in human capital and created an environment that attracts talent.
Since you took on the role of President, what changes have you made that you are most proud of?
Pathao is one of the highest funded startups in Bangladesh. Since I joined Pathao in 2018, initially as the CFO, we have raised over $35 million dollars in capital, making us one of the most highly funded startups in Bangladesh.
Over the past year since I took on the role of President, we were able to transform our business and move towards profitability, amid an unprecedented Covid-19 pandemic.
We have built an ecosystem of over 8 million users that we serve with our ridesharing, food delivery and courier services. We have created income opportunities for over 300,000 individuals, served over 30,000 f-commerce merchants that use our courier services (40% of whom are women), and over 10,000 restaurants.
Our courier business has expanded to all 64 districts, down to the upazila level. Today over 40% of deliveries are outside Dhaka. We have invested into our infrastructure, with new hubs and sorting facilities. We have reduced our delivery time and increased reliability.
Our food delivery business has achieved best-in-class customer satisfaction ratings as per data reported by DNCRP. We have the fastest delivery time in the market. We have doubled our food delivery fleet, provided training on health, hygiene and safety best practices, and registered our front-line service providers for vaccination.
In our ridesharing business, we have enhanced our service quality, and improved our already market-leading position. We have introduced product and tech improvements that have increased our reliability and service ratings.
We have also accelerated our path towards building a digital services platform. Over the past year, we introduced several new products and verticals, including grocery, medicine delivery, health, and entertainment.
We also take great pride in not only enabling access to more convenience and opportunities for our users, but also in creating a path for our drivers, delivery agents and partners to upscale their socio-economic conditions.
What are some of the new projects Pathao is working on?
Our vision is to build a digital services platform that can transform the lives of our consumers. To this end, we have already introduced a number of new services: online grocery delivery, medicine delivery, healthcare services, content-streaming, and games.
Before the end of this year, we will be launching fintech products for our consumers.
The penetration of digital payments is very low. The vast majority of transactions are still settled in cash – this presents an opportunity for a consumer tech company such as Pathao to facilitate digital payments and drive greater adoption.
Access to consumer credit is limited in Bangladesh. We have the lowest credit card penetration in the region; neighboring countries such as India and Indonesia have 6-7 times greater penetration.
Young people between the ages of 21 to 45, who also constitute Pathao’s primary target market, are among the most underserved. We are keen to develop solutions for these problems.
How is the venture capital scene different in Bangladesh from the rest of the world?
The investment landscape is still developing in Bangladesh. Over the last decade, we have seen about $350 million in capital flow into the tech and startup ecosystem in the country. However, we still have a long way to go, as compared to our regional peers such as India and Indonesia.
How has the pandemic affected your growth target?
Last year we saw faster digital adoption, with more people buying products and services online.
Our courier business grew three times in volume, our food delivery business saw a60% rise.
Our ridesharing business has also recovered to pre-Covid levels. Since the lockdown was lifted, we were able to mobilize our services very quickly.
We were also able to improve margins and generate positive cash flows from each of our business verticals – which is an important step in ensuring sustainability.
What is your vision for Pathao in the future?
Pathos’s vision has always been centered on enabling the digital revolution by bringing convenience to everyone’s doorstep, and opportunities within everyone’s reach.
We believe that in our own humble way, Pathao is contributing towards nation-building. We are laying the foundations of a digital infrastructure, in pursuit of our dream of “Moving Bangladesh” –forward and upward.