Founded in 2017, Misfit Technologies Limited provides tech solutions to companies across industries in the Asia Pacific region. Over the last few years, the company has experienced excellent growth in several markets and has become a leading provider of tech solutions to a long list of companies across industries including telecom, FMCGs, e-commerce, travel, and B2C.
In an interview with Future Startup published in 2021, Munimul shares how Misfit got started after a serendipitous mutual discussion between friends. Most things don’t follow a straight trajectory. Most things are random and serendipitous. The interesting thing about the randomness of reality is that it has logic to it. Invest enough time and attention in playing the randomness, it will lead you somewhere. The origin story of Misfit offers fascinating insights into building enterprises.
This is an excerpt from our conversation with Misfit CEO Munimul Islam.
This was mid-2017. I wanted to do something of my own but was not thinking about anything in particular. And I was not thinking about Misfit. To be honest, Misfit was not my idea. Fahad, who now runs iFarmer, came up with the idea. You interviewed him. Fahad at that time was also in Myanmar working on some Care Australia and USAID projects. We used to meet frequently and discuss different things. By that time we had some experience in the Myanmar market. I was traveling to and from Myanmar for 17/18 months. Fahad was doing the same for a bit longer.
By the virtue of traveling and staying in Myanmar, I made some acquaintances by that time. Some of them would come and ask “you have tech talents in Bangladesh, we need a few tech developers or solutions, could you connect me with someone.” I would generally say sure I would connect you with some people from my network.
This is where Jamil, Fahad, and Shuvo come in. You also interviewed Shuvo who runs the Alice Labs which we spun off. Jamil and Fahad both are from NSU and probably a few batches junior to me. We used to play football together and all that. After university, we used to keep in touch now and then but nothing regular. Then in Myanmar, there were not a lot of Bangladeshis whom you could connect with. Fahad was one of those people I used to spend a lot of time with talking about what we could do here and so on.
One day Fahad came and said: “Let’s start a company and we will call it Misfit Technologies”. I asked why the name. Fahad explained: “you have experience in telecom and startups. I have experience in the development sector. I would bring two more people. You know Jamil. And there is Shuvo who worked with Jamil at Maya.”
Shuvo just graduated from BUET and started working at Maya. That's how the three of us came together. We sat together, talked, and launched Misfit Technologies unofficially after a few months with four developers. I was still working full-time at Rocket. Fahad was working as well. Jamil and Shuvo left their job and joined Misfit full time. Shuvo was playing around with Chatbot, a relatively new technology at that time. I used to show around the products to people I knew. For example, I showed the chatbot tech to a friend and he got interested. But we did not have a price for the product as yet. So we had to figure things out as we went. We started playing around with things. That's how we started Misfit.
We did not register the company officially yet and were using one room in Khairul bhai's office, who later became an investor in Misfit. It was the office of Edge Consulting.
Once things relatively settled down, I started reaching out to people: “hey, I have put together a small dev shop, let me know if you need any service.” And we got a good response in those early days. I reached out to the CEO of an ecommerce marketplace in Indonesia and he said he needed 20 developers. He gave us the requirements shortly.
The good part was that Jamil and Shuvo were there. They understood the whole thing. They got the resources and prepared the team. Within 4 months, we became a team of 40 people. Then we became serious. We were like guys, this is shaping up and we need to do something about it.
Jamil and Shuvo were already working full time. After some deliberation, I decided to leave my job. I eventually resigned from Rocket in September but it took until December by the time I got released officially. I officially left Rocket in December 2017 and started full-time with Misfit.
In January 2018, we registered the company. I started visiting my contacts around the region presenting to them what we could do based on our last three-four months of work. We have been lucky that to this day, we never lost a client for non-performance. We overcame many challenges and always delivered good work to our clients. Our clients always come back and give us more work. When you serve a customer well, they will give you more business. We had and still have a lot of businesses in Southeast Asian markets such as Indonesia, Vietnam, Thailand, and so on. We have business in Europe in Sweden and Portugal. We have some business in the US and Australia.
The business we are talking about is an on-demand tech resource supply business which we call tech outsourcing in Bangladesh. We still do it. While doing that we realized that we need to be a product company if we want to be a big player. We started talking within the team. You could have a nice business doing the outsourcing. It is good money. But if you don't have products, SaaS, or licensing, it is always building the same thing from scratch. You get the money but scale becomes a challenge. it does not make sense. Rather we have the product and when we get requirements from customers, we do some customizations and deliver them to the customers. So we started building the back-end of marketplace products such as e-commerce, ride-sharing platforms, etc. Now when someone comes to us for an ecommerce marketplace solution, we can build it quickly. For example, we built an ecommerce marketplace for one of the largest companies in Bangladesh within a short period. We could do it because we had the backend ready and could deploy it fast. So we started working on products.
In markets where we were working such as Indonesia and Singapore, tech resources are expensive. Initially, we offered our services at a better price which helped us to attract and build relationships with customers.
Since we were coming to Myanmar, I discovered at that time that Myanmar has some unique challenges. In Bangladesh, we have an international standard national ID card. In Myanmar, national ID cards (NRC cards) are handwritten. The country does not have digital ID cards yet. You need this NRC card for doing almost everything from opening a bank account to buying a SIM card to opening an MFS account. You need this card everywhere. These companies take these NRC cards and type them and it takes about half an hour to process one. I realized this is a crazy thing and an OCR can solve this problem. We started working on and after a while developed an OCR that can read Burmese handwritten fonts at over 95 accuracies. It can also do facial verification with your photos and face matching and comparison.
Once the product was ready, I started reaching out to the telecom companies here. They initially did not see it as something useful.
Then last year PTD, which is similar to BTRC in Bangladesh, passed a new rule saying that there could not be more than two SIMs of a single operator against one NRC. There was no limitation before. The change created a major challenge for the telecom companies. They announced SIM registration and re-registration for the entire Myanmar population. That created an opportunity for our product. Telecom operators now use our OCR product. We are also giving it to the financial sector.
We have an excellent loyalty and reward system product. Many telecoms in Myanmar use our system. We maintain their backends and have long-term contracts with these companies.
We have built a long list of products from telemedicine to marketplaces. Alice was a product of Misfit. After getting huge traction, we decided to spin it off. But we still sell Alice as a reseller.
Software solutions usually require integration when you are giving these products to customers. That's where Misfit comes in when there are integration needs. Shuvo was once my partner and is still my partner. We now also have a business relationship. You know iFarmer which was also started within Misfit. Once the product received a lot of traction, we realized it should have its entity because it will be much bigger than Misfit. Alice and iFarmer, in terms of business and capabilities, both have huge growth potential. It was a good idea for us to spin them off.
We are testing a few other products and whenever we see a particular product getting a lot of traction, we will try to see bigger opportunities for that product. That’s how Misfit works.
We have a strong relationship with our clients in this part of the world. We are getting contracts competing with big players. We are going deeper into Southeast Asia and going towards the Philippines, Japan, and Vietnam. These markets are super tech-savvy. However, we think we now have the product, talent, and portfolio of the clients — we have created solutions for Fortune 500 companies — to explore these markets. We have built that reference. We now feel that we should expand and that’s what we are doing now.
Apart from that, we are looking into the Middle East and African markets where tech explosions are happening. This is a personal passion project for me. While we don't follow these markets, smart people are following the developments in these markets.
Tech has underlying similarities. Once you have a product, you can take it to many different markets. What Uber did in the US and other markets, Grab and others are doing similar things in this part of the world. Of course, approaches and strategies are different. But the problem is similar. In many instances, the back-end technology is not much different either. It means the tech I'm selling in Myanmar, I can sell the same tech in Indonesia with some customizations.
We are eyeing expansion seriously and aim to get it done by early 2022. That's the plan for now.
Munimul Islam: This is an interesting question. One of the common challenges of the early days is that you have work but you could not grow for lack of capital and resources. It is always a chicken and egg problem. That was our situation. You have clients. And to serve the clients, you need to hire developers and give them laptops and other amenities. But capital is always a challenge.
Initially, we invested from our own pockets. We set aside a certain plan and investment goal that regardless of the business we would invest this much in the first year. I invested all my savings into the business. I think everyone did the same. We needed money to hire and provide tools to our developers.
Shuvo and Jamil played a crucial role in these early days. They understood these challenges. Since Shuvo came from BUET, he could manage people. For example, we needed 10 developers, he managed to find 10 good people.
Having said that, finding the right talents has always been a challenge for us. It was more so in the early days. We have amazing resources in Bangladesh that everyone in this field knows. We have talents who are if not better at least at par with very qualified resources from any other markets. Talent has never been the problem. However, finding the right talent has been difficult.
You need capital to hire and enable talents. For example, you have a client who needs 20 developers. The client would not pay you in advance. But you have to hire these people, pay them from the first month, and get them high-quality laptops and tools. You need money for this. We went to the banks but the bank would not give us a loan because we don't have assets.
We were lucky that we had a few people who believed in us and invested in Misfit as angel investors.
Khairul bhai whom I mentioned earlier invested in us as an angel investor in those days. He works with the UN. We also raised an investment from Mahbub Rahman, a renowned businessman who owns organizations like Star Cineplex, and Peninsula Hotels among others. I have been working with him for many years on my other passion project where I run an entertainment company and do event management. It is a hobby and I do it whenever I get a chance.
When I went to Mahbub bhai, he understood the business well because he has an IT company as well called Base Technologies. Base is one of the companies that worked on the Submarine Cable connectivity in Bangladesh back in 1996 and 97. When I pitched the idea, he asked what we needed. I said we need money. That we could not buy laptops for money. He agreed to invest in us.
These people were angel investors. They did not ask about valuation or anything. They gave us money. I feel good that we took their money and did something good with it. Still, they are with us and are happy to be with us. We have raised money from Singapore. And we have a partner from India. We have four partners in the business and four angel investors. Two of the investors are strategic investors.
When you do business in Southeast Asia, Singapore is the financial hub. That's why most companies operating regionally have their HQ in Singapore. When we approach any large client and when they see that our banking, our audit, and everything is based in Singapore, they trust us. Singapore is one of the largest and most transparent financial hubs. To keep everything clean, we moved our HQ to Singapore. To register a company in Singapore, you need a Singaporean as a nominee director, a director, or a shareholder. My Singaporean partner is a Shareholder and a director in the company. He also works with us in our day-to-day operations. Plus he invested his money.
We have Sumit from India as our partner. Sumit and I both worked at Rocket. He was the founder of Shop.com which became Daraz. He used to look after the Myanmar, Nepal, and Sri Lanka operations. He played a vital role in the Alibaba acquisition of Daraz. As a tech entrepreneur and investor, he has a huge network in India and the South East Asian markets. He offers us insight into different markets, connects us with potential clients, and helps us understand the future direction of tech and competition. So that was the fundraising.
These all happened in the first half of 2018. We raised the capital we needed. We had a runway of 18 months. And we were fortunate that we got good-paying clients from the beginning. We never had to look back.
Today, we have 130+ people working at Misfit. We have teams in Bangladesh, Myanmar, Cambodia, Vietnam, Singapore, and Indonesia. We kept growing throughout the pandemic time.
To be honest, the pandemic was a challenge initially. We lost some clients, particularly in the European markets. We had some savings which helped us. We did not let any of our people go. We did not go into any salary cut. Instead, we asked our people to work on products throughout this period. If everything goes well, you will see something similar to Zoom from us soon. We are building this kind of tech keeping in mind that 5G is on the way and COVID-19 has accelerated the growth of digital services. We are working on some interesting technologies around audio, video, call, conference, screen sharing, and co-browsing.
We asked our developers to finish these products during the pandemic. That helped us. We are now getting clients for these products and selling them with a two-three years licenses.
We also partner with other technology companies in Bangladesh and sell their products under some revenue-sharing model. That's something we do with several partners in Bangladesh. We believe in collaboration and partnership. We can't build everything. Rather if someone has the solution we are looking for and he is the best at it, we prefer to collaborate with them.
Our on-demand tech service business is strong. We lost some businesses last year. But many of them are now returning.
Update on 15 August 2024: This article has been updated with a new image.
