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FS Weekly was on a short unannounced hiatus for the last almost two months. The last FS Weekly was sent in March. So it feels good to be back. But breaks are good. As Anne Lamott says, “almost everything will work again if you unplug it for a few minutes, including you.” Our modern life is structured in favor of ‘doing everything more’. We have taken the idea of productivity to the extreme. But non-stop productivity is not only a bad idea, it is ineffective. You can’t be truly productive if you don’t take time off, don’t rest, and don’t reflect. You will be working all the time but you will not be producing anything of much value. It is useful to consider breaks and time off seriously. Creating a structure in our daily life where we deliberately take time off to rest and reflect can significantly improve our productivity and our ability to produce high-quality work.
Today’s edition features five stories. In the interview, we have Startup Bangladesh Limited Managing Director Sami Ahmed laying out the vision of the Government-funded VC firm and its internal working mechanics.
We published our first quarterly funding report compiling deals that took place in the first three months of the year. The report offers revealing insights about Dhaka’s startup scene.
In another story, Ellis Miller of CodeCrafters shares practical lessons in building a business from scratch and why you should build your business at the speed of cash.
In an interesting move, Indian logistics startup Delhivery entered Bangladesh. Delhivery is the second Indian company to take an interest in the Bangladesh logistics market. Previously, ECOM Express made a strategic investment into Bangladeshi logistics startup Paperfly. Bangladesh has a fast-growing digital financial services market but the market is evolving in a very different way.
Finally, we take a deeper look into Chaldal’s growing diaper business.
Each story offers unique insights into how companies function and strategic decisions are made in fast-growing early-stage companies. Find links to the stories below.
Sami Ahmed is the Managing Director of Startup Bangladesh Limited, a Government of Bangladesh-funded VC firm, actively backing local startups.
Startup Bangladesh Limited is one of the most active local funds. The firm says it not only wants to invest in startups but it also aims to help transform the country's startup ecosystem. The Government-funded VC firm has backed 15 companies so far and counts some of the most prominent startups in its portfolio. It sits at the intersection of the private sector and public sector, which allows the firm the rare opportunity to see both worlds and provide practical policy inputs to shape the ecosystem. The firm has its own ambition and mandate. However, being a government-funded firm, its mandate should be different from conventional VC firms. It should remain ambitious in terms of making investments in high growth and game-changing startups. In addition, the firm has this unique opportunity to do much more.
We recently sat down with Mr. Ahmed to talk about his personal journey and views about the startup and tech landscape in Bangladesh, the vision of Startup Bangladesh, how the fund came into being, how the company functions, its investment thesis, ambition going forward, how it approaches its investments and works with the investee companies, its fascinating position at the intersection of the private sector and public sector, what it looks for in companies and team it invests in and much more.
12+ Bangladeshi startups raised more than $57Mn in disclosed investments in Q1 2022. This includes ShopUp’s $34 million Series B extension round led by Tiger Global announced in January 2022 and was originally part of its earlier series B round and Startup Bangladesh Limited’s nearly $2 million investments in 8 companies. Apart from this, several startups raised undisclosed seed and pre-seed investments. This is a significant leap from the previous years even if we exclude ShopUp’s $34 million investment.
Ellis Miller is the co-founder and Managing Director of CodeCrafters International, a Dhaka-based international technology development company. Founded in 2007 by Ellis and Lynita Miller, CodeCrafters provides customized software solutions to businesses in the USA and other parts of the world. The company maintains a development team in Dhaka, Bangladesh with a U.S.-based sales and support team.
Indian logistics unicorn Delhivery has entered Bangladesh as the company looks to expand beyond its border, online activities of the company show. The company has appointed former Chief Business Officer of Grameenphone Kazi Hassan as Bangladesh Country Head in March this year, per social media posts. Delhivery previously said it plans to scale its cross-border business and enter Bangladesh and Sri Lanka.
In Bangladesh, mobile financial services have transformed the financial services landscape over the last decade. It has changed how people send money from one place to another and has slowly given rise to digital payment. The country has seen a decent rise in online banking. Recent developments show financial service providers are willing to go further. Several NBFIs and Banks have introduced digital services such as online deposit, online DPS, and credit services independently and in partnership with MFS players in an effort to serve growing digital consumers and reach users who essentially don’t have access to formal banking services.
These developments are not surprising, considering Bangladesh’s digital financial landscape is still in its infancy but the market is growing fast.
There are some 3,100,000 babies born in Bangladesh per year, or around 8,600 every day (per UNICEF data from 2015). The market churns a lot—kids usually wear diapers for an average first three years—but within that window, business is quite sticky. Moms need diapers and they would have them keep coming.
This has given rise to a fast-growing diapers market in Bangladesh. First came the imported diapers. Imported brands dominated the market for a good few years. Then local companies took notice and started manufacturing locally. Today, while exported diaper brands continue to enjoy a significant presence in the market, they are no longer dominant. Local brands have excellent penetration.
When online commerce slowly started to gain momentum in Bangladesh back in 2015, Chaldal, which started in 2013, entered the diapers market and started selling diapers on its platform. Today, almost all major ecommerce marketplaces sell diapers. Chaldal, however, has managed to build a dominant position in the vertical.
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Other Interesting things
Book: The art of learning by Josh Waitzkin.
Book: Walk Through Walls: A Memoir by Marina Abramovic
A few beliefs (Morgan Housel). Link
We're in Good Hands. Link (beautiful)
How Not to Die (Paul Graham). Link