HungryNaki falls on its sword

Today must be a bittersweet moment for AD Ahmad, the chief executive officer of HungryNaki, the start-up that introduced the concept of enjoying restaurant food from the comforts of one’s homes to Bangladesh.  

The on-demand food delivery company he founded in 2013 with Tausif Ahmad and two others will announce its acquisition by Daraz, the Alibaba-owned e-commerce platform, in a development that can be viewed as the triumph of Goliath against David.

In that time, the company had to deal with the arrival of global food delivery giants Foodpanda and Uber Eats and their deep pockets as well as local competitors Pathao, Shohoz, Evaly, Kludio and CookUps -- and the passing of Tausif, the chief operating officer, in 2019 after a two-year battle with lung cancer.

Ahmad held fort all the while and, in the end, thriving amid the fierce competition seemed a mountain too big to climb.

While the details of the transaction have not been made public yet, Daraz is snapping up the homegrown food delivery company at a bargain, according to people involved with the negotiations.

“With great hopes, they started HungryNaki, but unfortunately, could not hack it in the competition with foreign investors,” said a person involved with the transaction on condition of anonymity.

So, Ahmad, the deputy CEO Ibrahim bin Mohiuddin and their other investors decided to sell the company, which has presence in five cities, to Daraz.

Their exit -- which follows that of Uber Eats in June last year -- comes at a time when the industry got a leg up thanks to the pandemic, which turbocharged digitalisation of all facets of life. 

“There should be a proper guideline or law to check the aggression of foreign players to enable the homegrown emerging and tech-based start-ups and e-commerce platforms to flourish,” he added.

For the Chinese e-commerce behemoth Alibaba, the deal makes a lot of sense, with growth opportunities at its home market shrinking and the Chinese government turning on its founder, Jack Ma.

Its e-commerce subsidiary in Bangladesh, Daraz, have gone on to become the market leader, with its 11.11 sales campaign receiving one lakh orders amounting to more than Tk 25 crore in the first hour.

From gadgets to automotive products, clothing to home accessories, groceries to pets, Daraz offers a smorgasbord of products and services for everyday living. 

What the platform was missing to become a truly online shopping mall was food delivery, which its upstart competitor Evaly had by way of its eFood. That gap has now been plugged with the purchase of HungryNaki.

Alibaba also has a presence in Bangladesh’s highly-promising mobile financial services industry: Alipay, its mobile and online payment subsidiary, owns 20 per cent of bKash, the market leader.

Ahmad declined to comment for the report, saying all details of the transaction would be disclosed at the press conference today.