Ravid Chowdhury is a Partner at RC Ventures, one of the active venture firms in Dhaka investing in technology companies with a portfolio including Pathao, Truck Lagbe, KajKey, EndingScene, and Jitun. As for Ravid, he has led and sits in the board of multiple startups in Bangladesh. Prior to venture capital, he worked in Private Equity for a few years in New York and Hong Kong. He was the first CFO of Pathao and led the company through several funding rounds including the GO-JEK investment.
In this excellent interview, Mr. Ravid talks with Future Startup about his journey to venture capital, his thoughts on investing in early-stage companies, how RC Ventures came into being, the state of RC Ventures operations today, what he looks for in founders and teams before making an investment, the sectors he is bullish about, how RC Ventures works with investee companies, tips for founders raising investment, his experience of investing in startups in Bangladesh, his lessons from working with early-stage founders over the years and much more.
Future Startup
Could you please tell us about yourself, your background, and your journey to what you are doing today?
Ravid Chowdhury
First of all, thank you Ruhul and Future Startup for the opportunity to speak with you and Future Startup.
My parents emigrated from Bangladesh to the US over 50 years ago. I was born and raised in Connecticut. I completed my undergrad from Wesleyan University and my Masters from Columbia University.
I worked in Private Equity for a few years in New York and Hong Kong and covered investments in South and Southeast Asia, including Bangladesh. I started advising start-ups in my free time, helping them with fundraising, financial modeling, strategy, finance, and data analysis. One of those companies I advised was Pathao. I had so much fun working with the early team Elias, Adnan, Fahad, Kishwar, and Sifat. We never took ourselves too seriously. At some point, Pathao needed a full-time CFO to help raise capital to launch the ride-sharing business. So I took a big risk. I left my job based in Hong Kong and joined a new Bangladeshi start-up for no salary. The company took off and I led the company through several financing rounds including the GO-JEK investment. The experience provided me a wide view of the Bangladeshi start-up environment, imparted on me how international VCs thought about investing in Bangladesh, and opened my eyes to the brewing opportunity.
Future Startup
What motivated you to get into early-stage startup investing? How do you think about investing in early-stage companies?
Ravid Chowdhury
Investing has provided me the opportunity to meet and work with inspiring founders and their brilliant teams, driven to solve real problems in their society and improve people’s lives.
When investing in early-stage companies, the most important aspect is the people.
Future Startup
Could you tell us about RC Ventures, i.e an overview of your operation and how do you operate?
Ravid Chowdhury
RC Ventures is a venture capital that invests in early-stage technology and internet companies in Bangladesh. Our team consists of frontier investors, seasoned entrepreneurs, and corporate advisors with investment transaction experience in Bangladesh and internationally. We usually are the first investors into a company and are very hands-on, working with the company on a daily or weekly basis. We extend our global network to help founders and teams connect with strategic investors and industry experts.
Future Startup
When and how did you get started? What went into building the initial operation of RC Ventures?
Ravid Chowdhury
After being the CFO of Pathao, founders and former colleagues were reaching out to me on a weekly basis for mentorship, advice, or to pitch their company. I was stunned to meet so many strong management teams and start-ups with real traction and growth. Further, the timing is right. Bangladesh is at an inflection point - internet penetration has been rapid and local founders were building scalable internet and technology businesses to meet the needs of these new internet consumers. International investors are just beginning to notice the Bangladesh market.
My brother Arshad Chowdhury had also begun investing in Bangladesh and we began bouncing ideas off each other. Arshad has an MBA from Carnegie Melon, worked as an investment banker in New York, and was a serial entrepreneur with several successful exits.
We found ourselves in a unique position to leverage our experiences as Bengalis, investors, and start-up operators to identify and invest in the best early stage companies in Bangladesh. We also have good separation of labor - I tend to focus on finance, corporate governance, reporting, and legal. My brother supports companies on product and with wisdom from decades of experience across all stages of a company lifecycle.
Future Startup
You have invested in a handful of Bangladeshi startups, do you have a list of priority sectors that you are interested in or you are sector agnostic?
Ravid Chowdhury
We focus on early-stage internet and technology companies in Bangladesh. We only invest after the company has demonstrated initial traction and real revenue or GMV. I believe Bangladesh can learn from what has worked in similar markets. For example, before investing in Truck Lagbe, I saw the success of unicorns Lalamove and Gogovan disrupting intra-city logistics in China and knew similar market dynamics in Bangladesh could support that business model. I saw there were several competitors in Bangladesh already, did some research and found Anayet Rashid and Mir Ekram of Truck Lagbe were the best team. A year later after investment, they are still the market leaders by several fold.
Prior to Pathao, I had worked in Indonesia and saw the explosive growth of GO-JEK and noted Bangladesh and Indonesia share similar public transportation dynamics - high population densities, limited public transport options, and increasing two-wheeler penetration.
From my years of exposure to other Asian markets, I started seeing trends and patterns in start-ups. I spend most of my time reading industry articles, researching companies, and speaking to industry experts.
Finally, the combined user base of our portfolio companies is in the millions, across all districts of Bangladesh in both 2C and 2B industries, and we have learned a lot about what works and what doesn’t in the Bangladesh context. We believe this unique understanding of the market helps increase our chances of success.
Future Startup
How do you find and solicit startups or how do startups find you? What do you look for in an idea or a pitch?
Ravid Chowdhury
Through my network in Bangladesh I get regular introductions and referrals to companies. I am happy to speak with anyone about their company for funding, advice or to just bounce off some ideas. Our portfolio company founders and management have made a fair amount of introductions to start ups as well.
Finally, many founders are friends, former colleagues so we may have already known them for years. For example, we invested in KajKey, the largest Bengali freelancing platform founded by Sabbir Ahmed. Sabbir and I worked together at Pathao previously and I knew he was talented, brilliant and hungry.
When looking at a pitch for the first time, I focus on what any VC would. First I look at the market size and competitive landscape of the problem they are seeking to solve. Second, is the solution scalable? Third, why is this founder and/or management team in a position to create the solution and what is their competitive advantage? Finally, what does the path to exit look like?
Future Startup
People often say that team/people is more important than idea, what do you look for in a founding team or in founders? Do you think there are a set of skills or traits that are important for founders to have or develop?
Ravid Chowdhury
I believe the most important thing about investing in early-stage companies is the founder(s) and team. In terms of skills or traits, the number one is always honesty.
After that, there are so many hard and soft skills a founder needs to master in order to be successful. Do they have the right technical skills and relevant work experience? Can they hire the right people and inspire them? Can they maintain maturity, and a clear head in difficult situations? Are they good public speakers? Are they open minded to new ideas? Do they understand how to analyze data? Can they separate their biases from decision making? Do they understand the basics of finance? There are too many skills and traits to list. And people like this are rare – I definitely haven’t mastered half the above things I mentioned myself, but I’m working on it.
Future Startup
How do you work with your investee companies?
Ravid Chowdhury
We are hands-on investors, connecting with our start-ups on a weekly basis, and even lead initiatives within the companies. For example, we get involved in sourcing and interviewing key management hires, or lead a new acquisition strategy, or clean up the accounting process and reporting. If the company has a need for something we are not qualified to help with ourselves, we find experts in our network to step in. When the company is ready, we definitely can help with fundraising.
Finally, we are in a position to offer advice. My brother and I have been in their shoes before running our own start-ups both internationally and within Bangladesh. We empathize with emotional rollercoaster and challenges of launching a start up in Bangladesh. And we’ve made mistakes, a lot of them, often expensive. We can guide our start-ups away from making those same mistakes.
Future Startup
Could you tell us about your experience of investing in early-stage companies in Dhaka? What are some mistakes startups make while raising investment that they should avoid?
Ravid Chowdhury
Honestly, it has been fantastic. Personally, it has been rewarding backing young entrepreneurs, watching them develop into leaders and forming strong relationships.
Professionally, all the companies in our portfolio have grown several fold since we have invested, and we can see their tangible positive impacts on the world and millions of lives every day. Pathao provides rides and deliveries to millions. Truck Lagbe is optimizing truck booking logistics, resulting in higher earnings for drivers, and lower shipping prices for customers. KajKey is democratizing access to employment to tens of thousands freelancers that can’t afford to come to the city, and providing an opportunity to work from home.
In terms of advice for raising, just be honest and transparent. If your sales didn’t go well last month, just say so. Don’t try to conceal it or spin it. Good investors will be able to tell if a founder is being deceptive. At the end of the day, these relationships are trust-based.
Finally, be prepared for a lot of “Nos” and don’t take it personally. Be gracious, polite, diligent, and persistent – not pushy. It might be a “no” today, so ask if you can follow up in a month or so with an update on your progress. After six months to a year of observing your company, and seeing the growth of your metrics, team and execution, that “no” will turn into a “yes.”
Future Startup
What’s your take on overall startup scene in Bangladesh? What are the challenges and where are the opportunities? Where do we stand if you compare Bangladesh with markets like the US? What are the areas that need improvement?
Ravid Chowdhury
The Bangladesh startup ecosystem is just now starting to catalyze. The number of promising start-ups with strong management teams is increasing every day. Something has significantly changed in the environment in recent years.
The US is an extremely mature alternative investment climate. It’s still early days for Bangladesh VC, however the ecosystem is improving at an accelerating rate. We are hearing of new barriers being broken on a weekly or monthly basis. Every other week, I am speaking with an investor that is beginning to take a look at Bangladesh for the first time.
Future Startup
What are the challenges of investing in early stage startups in Bangladesh?
Ravid Chowdhury
Although the fundamentals of the market are strong and Bangladesh consistently outperforms regional peers on growth and stability metrics, Bangladesh still has a perception issue with the international investment community, where the perceived risks are higher than reality. Also, lack of awareness of the Bangladesh and the growth opportunity is another challenge. This will improve with time as we see more exceptional start-ups achieving what those before could not.
Future Startup
What suggestions would you give to early-stage entrepreneurs looking to raise funding?
Ravid Chowdhury
First think about if raising external capital is the right move for you and your business. Once you have investors, it’s no longer just your company. It is like a marriage, where you will have to make decisions together and answer to a board of directors. Also make sure it is the right investor for you and they can add some strategic value beyond capital.
Second, be prepared. Have a pitch deck, financial model, company metrics and a data room ready. Try to anticipate follow up questions investors will have and have materials ready so you can reply immediately.
Finally, be prepared for a lot of “Nos” and don’t take it personally. Be gracious, polite, diligent, and persistent – not pushy. It might be a “no” today, so ask if you can follow up in a month or so with an update on your progress. After six months to a year of observing your company, and seeing the growth of your metrics, team and execution, that “no” will turn into a “yes.”
Future Startup
What some sectors/verticals are you bullish about?
Ravid Chowdhury
I believe we will continue to see opportunities in transportation, logistics, B2B SaaS, social and entertainment platforms, marketplaces, online education, and specialized e-commerce.
Future Startup
What are some lessons you have learned from your journey so far about investing, work, startups, and life?
Ravid Chowdhury
Never lose sight of what’s important – family, friends, health, life experiences, and well-being. Make time for them. Have fun and laugh a lot.
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Update at 8:28 am on Sept 12, 2019: The interview has been updated with new information.
