In the world of Dhaka's growing online food delivery business, Cookups is a fascinating name. In 2017, when we first covered Cookups, it was just a facebook group, a community of 16,000 people selling and buying homemade foods, and a small team of about eight people. And today, after a year, it is an entirely different company. It has launched web and app; it claims to have thousands of daily active users, expanded to groceries, health food and catering, and today, it aims to build an ecosystem of products and services around safe food.
In this excellent interview, Cookups founders, Namira Hossain and Misha Ali, talk about the growth of their food-tech company, how Cookups is building a platform at the intersection of homemade food, catering, health food, and groceries, how its distinct services such as groceries and catering has an underlying common thread and are part of a bigger plan, how Cookups has come where it is today, the ambition of Cookups, how to raise money for your startup, and much more.
Future Startup
Thank you for agreeing to do this interview with us. We spoke in April last year. At that time, Cookups were a few months into its operation. You had about a 100 cooks/merchants on your platform, which was a Facebook group at that time and you were re yet to launch your app and web. You had about 16,000 members and were serving around 1500 orders a month. We How much has Cookups grown over the last one year?
Namira Hossain
This month we are going to cross a thousand registered Cooks. We have 1,10,000 members in our group now. Apart from that, we have also launched our app and website.
Misha Ali
We have about 20 thousand registered users on our web and app, 19 thousand monthly active users and 31 thousand app downloads.
Misha Ali
Not all of our active users essentially order from us. This is the number of people visit our web and use our app every month. And a growing percentage of users are now ordering from us. Our goal is to increase the overall conversion as we go. We are currently working on that.
Namira Hossain
We launched our website just this June, which means our web platform is pretty young. We have successfully migrated our users to web and app. Over 98% of our orders come through our official channels, so we are happy with the response.
Misha Ali
We have not grown much regarding the number of orders, not as much as we would like. It has also dropped a bit between two Eid vacations. Apart from that, we have made some significant changes in our model. We've moved to a commission model from our previous membership model. It has affected our relationship with our cooks and sales.
Namira Hossain
In the meantime, we have also migrated from FB group to website. Although we anticipated that it would be difficult to bring people from FB to the web, it has been relatively easy for us. However, it took some time to make that transition, which has also taken a toll on our growth.
We transitioned to a commission model, and this also coincided with the Facebook changing their algorithm which meant we could not enjoy the same kind of organic reach as we did previously, all these things have affected our growth to some extent.
Misha Ali
FB algorithm change affected us in a meaningful way. It caused a significant drop in our reach. It was a challenge to find an immediate solution to it because it takes time to ramp up your marketing and bring things to normal. So it has been relatively challenging last 6-7 months due to all these changes.
Finally, we are in a comfortable place now. We are now spending on marketing. We are investing in search and FB. We are organizing events. Now things are better, and we see an uptick in growth.
It took us six months longer than what we thought it would take us. We thought that we would be able to raise money in three months and then when we really started to meet people, only then we realized how time-consuming and laborious raising money is. It took us about nine months to raise the investment. We spent a significant percentage of our time in investor meeting and investment-related activities.
Future Startup
When we last spoke, you were considering raising investment. You have raised funding, right? And you also went through the ygap program?
Namira
We were not considering it then actually. We thought we would raise funding later, but when we realized we needed to raise investment, we came to know that it takes a long time to raise investment.
You can't self-fund yourself forever. Every startup needs to raise investment at some point in time to accelerate their growth. And you shouldn’t take money from anyone who agrees to give you money. There should be an alignment of passion and strategy between you and your investor.
Misha Ali
It takes at least six months to raise investment. So you have to plan. It took us six months longer than what we thought it would take us. We felt that we would be able to raise money in three months and then when we really started to meet people, only then we realized how time-consuming and laborious raising money is.
It took us about nine months to raise the investment. We spent a significant percentage of our time in investor meeting and investment-related activities.
Namira Hossain
In Bangladesh, you would mostly meet traditional businessmen who are not necessarily accustomed to how startups work. They might not share your vision, but want control and quick returns rather than looking at the long term.
Misha Ali
We consciously decided that we would not raise money if we could not find people who have the similar vision as ours. Luckily, we have found two angel investors who found our venture exciting and who match our vision. We are thankful to them for taking a chance on us.
We also applied for the pre-seed grant from the IDEA project, an excellent initiative by the Government of Bangladesh, and we got it, and now we could apply for further investment.
Future Startup
How much have you raised?
Misha
We have raised some funds, but yet to close this round.
Future Startup
How big is your team? How are you doing in terms of business?
Namira
Now we have 23 people in our team, excluding riders. Including riders, we have 33.
Misha Ali
Initially, we grew too fast, and then we had to go through a process of correction. Over the past one year, we have automated a lot of our operations, which has helped us to improve efficiency.
As part of our expansion, we have incorporated catering under a sub-brand called CookupsX, which adheres to our quality and hygiene standards. We have started a healthy meal delivery service called CookupsFit. And we are also selling groceries and responsibly produced agricultural products, such as ghee, honey, and vegetables, under our sub-brand Growups.
Future Startup
Could you, please, tell us more about your journey from April 2017 to where Cookups is today?
Namira
A lot has happened since we last spoke. The next big event on our timeline after our conversation would be the launch of our app on both iOS and Android, which we made public in August 2017. Then we went on work on migrating our users from our FB group to the app, which was not as hard as we anticipated initially. We used, tried and tested marketing strategies which worked effectively.
We also started hosting events. We hosted two events in 2017. We hosted our first event in Ramadan of last year. In March this year, we did a few more events. March was one of best months in terms of revenue, and it was a good milestone for us. Then we released our website this June.
Product-wise, we have also launched a few sub-brands, which have grown the scope of our business. When we started Cookups, we wanted to be Bangladesh’s largest homemade food marketplace, but that is not all we want to be. We want to be THE space where you can get food you can trust.
As part of our expansion, we have incorporated catering under a sub-brand called CookupsX, which adheres to our quality and hygiene standards. We have started a healthy meal delivery service called CookupsFit. And we are also selling groceries and responsibly produced agricultural products, such as ghee, honey, and vegetables, under our sub-brand Growups.
Future Startup
That's some exciting developments. It means your ambition for the platform has grown and now from a homemade food marketplace, you have become a marketplace for food. How do you define Cookups now?
Namira
I call it a one-stop solution for food you can trust.
Future Startup
Do you mean one stop solution for Healthy food? Where do you draw the line?
Misha Ali
Food safety is a major issue in Bangladesh. It affects every one of us regardless of our position in society. We want to give our users the option to have safe food whatever economic strata they might fall under, and whatever price range they prefer, starting from mid-range CookupsX to relatively high-end CookupsFit. And to connect all these, we have our groceries, Growups. For instance, today I cooked on Cookups, and I used vegetables and ingredients from Growups. Because I know these are healthy ingredients. This is what we want to do - eventually connecting our cooks, catering services and restaurants with Growups and encourage them to use healthy ingredients in making their meals.
We are building an ecosystem that starts with cooks, catering services, and food suppliers and ties up Growups, which empowers our cooks and other sellers use healthy ingredients in preparing their food. We want to be a one-stop solution for safe food, healthy food. We want to be a platform where people could order any food and know that what they are buying is safe.
Future Startup
Now, this is a pretty significant shift, from being a homemade food platform to getting into catering and groceries and to becoming a one-stop solution for safe food, how do manage all these disperse parts?
Namira
It seems like a significant shift but, in reality, it is not that big of a change. We have already been creating a platform for safe food as well as the market.
Misha Ali
We are working with a number of vendors who produce or distribute safe food. For example, Khaas Food is one of our vendors among others.
Future Startup
What is CookupsFit?
Namira
Before we launched Cookups, Misha and I wanted to work with healthy food, because we needed a solution for ourselves from where we could have access to healthy lunches without worrying about it. But then we realized we need to build the platform not just for healthy food, but one for homemade food which would empower cooks and enable them to earn. Once we already had the market, we launched CookupsFit.
We both try to live and eat healthy. Living and working in this city, it gets difficult. You have to plan and prep your meals and CookupsFit is our answer to that. CookupsFit does all that for you, freeing you from worrying about what to eat and whether it is healthy or not. We provide all the details for you to stay on track with your fitness goals - including calorie counts and macro counts.
Misha
With Cookups obviously, we are relying on the marketplace, on our sellers, who sell what they want. We can give them guidelines. We can tell them make your food healthy. But the perception of healthy, our perception and their perception, may not be the same.
We are an open marketplace. We give people a platform to cook and sell whatever they want. Since we realized that we can't control the supply hundred percent all the time, we want to build another type of services using the base of Cookups that we can control. Catering, for e.g. There are many catering companies out there. We are taking the best of these companies who ensure the quality, and they are suppliers there. Same goes for health food. We wanted to control this, and we thought let’s get our own chef and have more control over this category of food. That’s how Cookupsfit came up.
We are building an ecosystem that starts with cooks, catering services, and food suppliers and ties up Growups, which empowers our cooks and other sellers use healthy ingredients in preparing their food. We want to be a one-stop solution for safe food, healthy food. We want to be a platform where people could order any kind of food and know that what they are buying is safe.
Future Startup
Does it mean you make the foods/meals for CookupsFit?
Misha
Yes, some of them.
Namira
We trial everything before it is going to our users. We give recipes to the cooks, sample them once the food is prepared and then we veto it before it is sold on the platform.
Misha
Although you mentioned it is a big jump, it is not actually. To ensure healthy food, it has to start with the ingredients. You have to start from the raw materials. For example, if I have adulterated brinjal and if I sell health food with that adulterated brinjal, apparently it is not health food. So for us, it (getting into groceries and launching Growups) was a natural progression that we would go down the supply chain and get into the business of ingredients.
Namira
That’s also something that we always wanted to do. We always wanted to work with the farmers and producers to bring in healthy ingredients.
Future Startup
The challenge I’m talking about is from the business perspective. If you have a bunch of people selling homemade food, that’s a very straightforward business. When your vendors sell through your platform, you get a commission. But now you have all these different components, how do you manage all these different things?
Misha Ali
The business model is the same. We still get the commission from our vendors. We are doing it in two ways with Growups. So I would go through the two of them. With Growups, it is ingredients, right. It's vegetables. So what do we do? We do the same thing. We enlist 4-5 businesses that we know are trusted suppliers like khaas food, Amar Desh Amar Gram and we tell them that we are a marketplace, we will put your product on our platform, you sell your product, we will just take a commission. It is the same thing as if they were a cook.
With CookupsFit also we are talking with some restaurants who would take recipes and ingredients from us and make the food. Today Restaurant A is doing health food for us using our ingredients and tomorrow restaurant B would be doing it for us. That’s the model we are trying to implement.
Same with the catering Kitchens. For catering it is simple, you want the same food every day. There are thousands of these catering businesses. How do they do their marketing? It is very limited. Again, we are giving them a platform. You put your food on, if people order, you just do the delivery, and we take a commission. So from the operational perspective, it is not that big a shift. It is a similar model.
Future Startup
That sounds interesting. If you could connect your Cooks and catering services with Growups for ingredients, then you have a big grocery business right there?
Namira
That’s something that we want to achieve over the time. We want all the foods that we sell under the umbrella of Cookups to be safe, and Growups is our way of ensuring that ingredients are safe.
Future Startup
How many of your Cooks are now buying from Growups?
Misha
We started with ghee and Honey, and a few other similar products. Those are slow moving products. We got vegetables on our platform last week. The response has been excellent. We are posting these baskets of different values and sizes starting from 300 taka per basket, and in the first week, we have sold 30 orders, which is pretty good because we did not do any marketing.
There is a real demand for safe ingredients in the market. Now that we have this problem solved, we can help our Cooks even better. We are now tying things together. We are asking our Cooks to use our ingredients. Where we can control, we are asking people to use our vegetables and ingredients, and where we could not control, we are encouraging it by giving them various incentives.
Future Startup
What percentage of your orders are coming from FB vs. your web and app?
Namira
Now all our users use app and web to order.
Misha
Even when we advertise on FB or the group, the call to action is the app. We don’t take any orders on FB.
Future Startup
How are you doing in terms of business?
Namira
We are a startup, and we are in the investment phase. We have been seeing substantial growth over the past months. The opportunity in this sector is huge, and we believe we are just getting started.
Misha
As I said past six months were difficult. We could not spend much on marketing and growth. Most of our spending was going on the operating expenses. As a result, we were not growing much.
As a startup, it does not matter if you are losing money or not; you have to grow. At least in the short term, growth is more important than money. However, things have changed for us. We are now investing in growth, and we could see that the trends are in the right direction.
There is a real demand for safe ingredients in the market. Now that we have this problem solved, we can help our Cooks even better. We are now tying things together. We are asking our Cooks to use our ingredients. Where we can control, we are asking people to use our vegetables and ingredients, and where we could not control, we are encouraging it by giving them various incentives.
Future Startup
How do you reach out to your customers?
Namira
Regarding paid promotions, we are doing FB ads as well as Google.
Misha
Discount is something that works. So we are giving a lot of discounts and cash back and stuff. Right now when we offer a discount, we see an immediate result. That’s what we are doing.
Future Startup
What are some of the biggest challenges you’ve faced?
Namira
The algorithm change of FB affected us in a significant way because we started on FB as a business and we then grew there, and we had a pretty big user base who used to interact with us on the platform. When FB changed the algorithm, it became a big issue for us. That change then coincided with we changing our model from monthly fees to the commission. Although it did not affect us much, it was a challenge at least for a while.
When you are a platform, you have to maintain fantastic communication with your suppliers. That’s hard to do unless it is built in into your system. There is a disconnect sometimes, but we are finding better ways to get it done efficiently.
Given the nature of traffic in Dhaka, ensuring on-time delivery is a challenge. It is a significant part of customer satisfaction. This is an expectation that customers have. Even though we try our best to get Diners their food on time, we do get complaints about delivery. It is hard to be efficient there because there are a lot of factors playing into it that is out of our control. But we are trying to get more efficient at it by using technological solutions.
Future Startup
In many ways, you are in the delivery business. And people expect you to deliver on time because that’s why they are ordering it from you.
Misha
I would say 50% of our business is delivery, and 50% is marketing. We generate orders, and then we deliver. That’s it. Logistics has been a challenge. Particularly scaling delivery. It is easy until a point, but when getting past that size, it is hard. It is even harder to recruit delivery people. It is hard to find people who would stay on the job for a more extended period.
Namira
The challenge every startup goes through is finding and keeping quality people. It is always hard to do that. In startups, we need a special breed of people. You need people who would go an extra mile and do the impossible, and they are rare to find. And even if you get lucky and find someone, it is hard to retain them. People prefer more posh jobs in big brands.
Future Startup
I think one of the essential components of your business is building and managing a community, how do you do that? What is the secret of building a community?
Misha
One of the reasons we have been successful in building community is FB. We have been able to take advantage of the platform to our benefits and bring people together who love safe food and who want to sell and buy food.
The challenge with the community has been maintaining the community feel as we scale. As we have grown, people have told us that you guys don’t feel like a community anymore. It has become harder to manage as well.
We have taken customer service very seriously. We work hard on giving the best possible service to our customers. When there is a complaint, we go all in to solve it at the fastest possible time. These are some of the things that have helped us.
Namira
Customer service is something many brands don’t take seriously in Bangladesh. Typically, companies take a lackluster approach to it. We don’t. With our Cooks and users alike, we try to address their challenges as quickly as possible.
Misha
We are doing a lot of influencer marketing. We are planning to do more in the space as we go.
Future Startup
What is your take on raising funding? Do you plan to raise funding any time soon?
Misha
When you are raising money, always raise more than what you need at the time. You will need more in no time. You are never done with raising funding. You raised fund and then you would need further funding soon enough. It is an ongoing process. Plan and work on it all the time if you want to raise money in the near future.
We are currently getting ready to raise the next round of investment. We have seen that it takes a minimum of six months to raise funding. So we will be at it until we decide that we are not going to raise anymore soon.
Future Startup
What are the plans for growth? And what are a few goals for the next year?
Misha
We have not invested much in marketing in the past. Now that we are in a position to do so, we plan to ramp up our marketing efforts which I believe will help us grow faster in the coming days.
Since the beginning till November 2017, our marketing spend was very low compared to other companies. We are now planning to invest more in marketing, discounts and other promotional efforts. We have started doing that from this month, and we have seen a good response. We are going to continue this strategy.
Misha
We are getting more and more business from CookupsFit and CookupsX, and our Growups business is also growing. We plan to continue to push these categories as we go. We are expecting that there will be good growth in these areas. Growups and CookupsFit together is about 20% of our orders business now.
Namira
By the end of next year, we want to reach 5000 Cooks on our platform. We want to reach 24000 orders per month. Overall, we want to be the trusted platform for foods in Bangladesh. Whether it is ingredients, health food, or catering, or office food, we want to be the solution in Bangladesh that people trust.
Trust is crucial for us because that is something of short supply in the market. If you want quality food, you can rely on us.
Future Startup
Since you mentioned office, do you have any B2B product?
Misha
We have just started our corporate business where businesses would be able to get our products in a manner that caters to their needs. We have just launched the service and let’s see how it goes. You could place orders for a month or a day. So we are building the service. We have not started the marketing effort yet, but we will be starting soon.
Future Startup
Do you plan to onboard restaurants as well?
Namira
Maybe.
Misha
We have been thinking about reaching out to restaurants for a particular reason. We don’t want to be a delivery company for restaurants. We have some plans which you will see in the coming days.
Future Startup
Do you have any subscription product now?
Namira
We don’t have one yet, but we plan to launch one in the future.
Misha
This is something we have seen interest in. People don’t like to think about food every day. The challenge is supply, which we have till now with home cook because they are not always consistent. So with catering services on our platform, we will be able to explore these areas I hope.
When you are raising money, always raise more than what you need at the time. You will be needing more in no time. You are never done with raising funding. You raised fund and then you would need further funding soon enough. It is an ongoing process. Plan ahead and work on it all the time if you want to raise money in the near future.
Update on October 18 at 11:20 am: The interview has been updated with new information.
