Chaldal was founded in 2013 by three friends Waseem Alim (CEO), Zia Ashraf (COO), and Tejas Viswanath (CTO). It was the early days of ecommerce in Bangladesh and online grocery shopping was not a thing in Dhaka yet. It took Chaldal a while to educate the market. In the early days, the startup was delivering 5 orders a day. Although the online grocery market today is nothing compared to physical retail, Chaldal has come a long way from where it was in 2013. Today, it delivers around 2000 orders per day across Dhaka city.
From a tiny team of five people in 2013, it has grown to a team of over 600 people. The company has raised multiple rounds of investment from investors like Y Combinator, IFC, IDLC and more. It is the first Bangladeshi startup to attend prestigious incubator program Y Combinator.
The story of Chaldal is an interesting one and offers valuable lessons for founders on how to approach building startups. Here are 7 facts about Chaldal that I hope will fascinate you. I hope you enjoy reading this article as much as I enjoyed researching it.
Y Combinator, the renowned Silicon Valley-based incubator program provides seed funding for startups. Seed funding is the earliest stage of venture funding. It pays the expenses while a startup is getting started. Even though it is not easy to get backed up by Y Combinator, an increasing number of startups and early-stage companies are interested to get into YC due to its high-quality standard and invaluable network and Chaldal is one of the two startups from Bangladesh that could get into Y Combinator.
Chaldal has raised US$5.5M in its most recent round of investment closed in October 2018 from three investors Y Combinator, IFC and IDLC Finance Limited. Previously, it raised an undisclosed seed round. It is one of the top-funded startups in Bangladesh.
Building a startup is extremely hard work. Here is a story from the first year of Chaldal, which Chaldal Founder Waseem Alim shared with us in an interview in 2015:
The hardest day for me as a CEO was when I missed my marriage anniversary because I had to go to deliver an order. That was my 1st marriage anniversary. Everyone was waiting for me to celebrate. This was right after I came back from the US. Zia had to go to India. We got like 25 orders all over from Dhaka. We were operating out of an apartment which was half of this apartment [indicating the room we’re sitting].
The whole day all I have been doing was taking calls and responding to calls. Then I saw that one of the cars went to deliver in Jatrabari, so they were stuck there for a while. The model back then was that someone would get the products from the market. I would sort it in the office and send it for delivery. I used to oversee sorting to prevent mistakes. But now that one of our cars is stuck in Jatrabari and we have to deliver on time we decided otherwise. I told the acquirer to sort the product on the go and I’ll drive. We went to a house, they made us wait for like 2 hours. The delivery man was up there; the customer was like counting and it took a while.
I’ve been driving around all day. At 8 pm when my wife came to pick me up from the office I got a call from a customer, ‘I ordered for 5kg rice and you did not deliver it’. I told my wife I have to do this. So I went to Gulshan-1 bazaar, bought 5kg of rice and made the delivery.
Then I got another call, ‘Sir, the car has broken down’ and this was 9.30 pm in the night. It had broken down in Uttarkhan or Dokkhinkhan; I did not even know the area. I was like I can’t drive anymore; I’ll get back to you. Then I call up one of my friends; he ended up joining Chaldal later on.
So my friend and I went to that place at 11:00 pm. The road was the worst I’ve seen in my life. I think it rained and it was full of mud. At first, we tried with ropes but that did not work. So we had to put two chains. I finally got back home at 2:00 am. I started that day at 8:00 am. That was my hardest day in Chaldal. I hope I don’t ever have to do that again.
This is a good example for answering how nothing prepares you for a startup CEO job.
Chaldal is a tech company and most people don't get why we need technology to sell rice and dal, says Tejas Viswanath, one of the founders of Chaldal to FS. Chaldal uses software everywhere. They have software to monitor wastage, to predict how many vegetables they will sell the next day, to mark things that are delivered and so on. Here is Chaldal co-founder and CTO Tejas on how Chaldal uses technology:
Selling groceries at scale is a very complex problem. Currently, we’re processing more than 1500 orders daily, and some days we’re processing more than 2500. This number is doubling every 6 months. Each order contains on average 15 items, and these items can be in any one of our 8 warehouses.
We have about 8000 products in our catalog and some items may need to be purchased from local markets. Our software helps us put all this together and get it into the customer’s hands within the hour.
The margins on selling grocery are very small, and we need to do this very efficiently for us to remain in business. This is hard, physical work and it is very easy to make a mistake. We also need to react to exceptional situations, such as a product being damaged or missing. Doing this with pen and paper is impossible when you’re targeting 1-hour deliveries. Technology enables us to provide these services.
He then goes on:
We have two main challenges – increasing on-time delivery record and making sure we can deliver all ordered products. Both are difficult problems to solve.
Several issues can arise during deliveries – traffic, delivery man getting into accidents, vehicle failures, some customers take a long time to collect their products etc. Our software needs to get better at being able to predict such delays and plan accordingly.
We also need to be able to plan our contingencies better in the face of unpredictable events. At the same time, we will need to keep the entire system very efficient, so that we can keep the delivery cost low.
Keeping our deliveries efficient cannot be solved perfectly using today’s computers, as it is a combination of 4 Travelling Salesman Problems (TSPs). A TSP is a well-known example that belongs to a class of problems known as NP-complete; solving them efficiently is a fundamentally unsolved problem in computer science. The best we can do is to come up with an approximation using heuristics.
Our inventory tracking is completely automated, however, sometimes products go missing or are found damaged without a replacement. Some vendors may delay their supply of these products. Our handling of such situations need to get better, and we’re working very hard on getting our fulfillment rate close to 100%.
Chaldal has launched the largest ecommerce warehouse in Bangladesh in October 2018, which is located in Dhaka’s Banasree area. The 15,000 square feet warehouse, named as the mothership, has the capacity to accommodate over 1,000,000+ products. 100 employees will be able to work at the same time. Chaldal says it will be able to serve over 300,000 customers across Dhaka city from the warehouse.
Chaldal launched the first grocery subscription service in the country in 2016, where Chaldal users could schedule their orders for an entire week or moth and get them delivered accordingly without worrying for shopping daily. Here is Chaldal CEO Waseem Alim:
“The idea originally came from my co-founder Zia Ashraf. He needs around 10 liters of water every three day for which he has to go online and place an order every time. Then he asked why do I have to order every time, why can’t I order at once for an entire month. That’s when we thought about launching a subscription feature where people can conveniently schedule their regular weekly or monthly orders” says Waseem Alim of Chaldal. Now you can pre-schedule orders, say 5 liters of water every week on Saturday, and get it delivered. We have plans to tweak the feature as we go.”
The feature is yet to become a widely popular one. However, Chaldal plans to continue its experiment with the feature in the coming days.