December 2022 Edition: 03 Startups we’re watching

1. Jahaji Limited

Jahaji is a technology service provider for the inland water transport (IWT) sector in Bangladesh. The company has built an app-based B2B marketplace for various stakeholders of the inland water transport sector including ship owners, shipping staff, carriers, suppliers, agents, importers, brokers, local sellers, and buyers who are involved in transporting goods using the inland waterway. 

What you need to know 

• Founded by Kajal Abdullah and Abhinandan Jotdar in 2019, the Jahaji app broadly provides three services that users can access via the Jahaji app.
  • A tracking and monitoring service designed for the ship owner, carrier, agent, transport, importer, and mother vessel owner. It allows them to track ships in real time. 
  • A booking service primarily designed for suppliers and carriers. It allows a client to book the required vessels from a wide range of options in a minute. Customers can compare rates, see current locations and capacities, and book ships directly from the owner. Booking service also allows the customer to monitor trips in real time. 
  • The third service is a marketplace, which Jahaji claims is a Jahaji innovation without any parallels anywhere in the world. It enables local buyers and sellers to buy and sell bulk commodities from running ships. Users can also check product quality in the Jahaji app. 
  • The app has a job portal for inland staff where standard vessel crew can be hired.
  • The company also provides free insurance service for IWT shipping staff. 

Jahaji has received a fair bit of attention. It is one of the first startups from Bangladesh to attend the Stanford Seed Spark South Asia program. The company says 500 vessels currently use its tracking device and it has 6,000 crew profiles on its job portal.

Why it matters 

1. “Inland water transport has always been a natural and relatively cheaper means of transport in Bangladesh. In many areas, it is the only mode of transport.” Many people consider the river network of Bangladesh as an important transport artery in the country's transport sector. Including the unclassified routes, the total length of Bangladesh’s waterway is about 13,000 km. An ESCAP report suggests inland waterways of Bangladesh carry about 14% of annual passengers — 87.80 million per year and 35% of annual freight volume — 0.58 million tons per year. While the water transport system in Bangladesh doesn’t receive much attention and investment, it is a huge sector and needs modernization. In many instances, policymakers are waking up to the importance of the sector. As the policy posture towards the sector changes, it is likely to attract greater investment and activities in the coming years. 

2. It is fascinating that Jahaji founders took interest in a sector that is usually overlooked. While there are Jahaji-type services for the road transport sector, there are not many similar solutions for the water transport sector. One reason there are not many players in the space could be what Paul Graham of YC calls Schlep blindness where you don’t approach potentially uncomfortable challenges — ideas and works. And it can turn into a huge advantage for Jahahi if the company can convince water transport stakeholders to adopt its service and build a service that genuinely addresses the challenges the sector face. 

3. Jahahi is not doing anything new. You can find many parallels for Jahaji in the road transport sector. In many ways, what Jahaji is doing is not much different from what companies like Truck Lagbe and Goods in Motion have been trying to do for the trucking industry. These freight booking and logistics companies are marketplaces that connect truck owners, drivers, and businesses that need trucks and enable them to book, monitor, and track their transports. While the dynamics of these two industries are different and hence there are various product-level differences as well, in many ways, Jahaji does the same for the water transport sector. So there are theoretical parallels to what Jahaji has been trying to do. 

2. My Fuel Pump Limited

MyFuelPump Limited is an on-demand online fuel delivery platform. Users can order fuel on the My Fuel Pump app and get the fuel delivered to their doorsteps. The company says it delivers fuel to customers at regular petrol pump price. The company has a fleet of specialized tanker trucks for delivering fuel that can go to remote locations. 

Founded in 2021 by Partha Pratim Choudhury, My Fuel Pump aims to automate the supply chain system of the fuel sector in the country. 

What you need to know  

• My Fuel Pump provides several interesting services. The company has a B2B on-demand fuel delivery service where it directly delivers diesel to organizations and individual customers. The company says it currently delivers only diesel but plans to expand into other fuels such as octan, petrol, etc. Apart from that, MFP also delivers Omera LPG cylinders to customers. 
• The company currently covers Dhaka, Gazipur, and Narsingdi and can deliver fuels within 3 hours. For LPG cylinder delivery, it takes only one hour. The company plans to expand all over Bangladesh in the next five years. 
• The company says it provides exacting quality fuel at the market price and it saves customers from the inconvenience of running to petrol pumps for fuel when they run out of fuel for their generators and other purposes.  
• B2B clients can order their monthly fuel needs in one single platform. For refueling, they can also go to MFP-verified petrol pumps in the country and collect fuel on the way to their destination.    
• The company has a minimum order cap which starts from 50 liters.    

Why it matters 

On-demand digital commerce is an expanding trend. But we predominantly see services around fashion, services, and other similar low-entry barrier verticals where there is already meaningful competition. Relative to that fuel delivery is a relatively challenging vertical. There are not many players in the vertical offering a similar solution as MFP. One competitive possibility for MFP is if the existing players in the fuel distribution business decide to enter the vertical. But in many instances, it will make sense for these companies to partner with a third-party partner who specializes in delivery. On the customer end, this is a genuine pain point that needs a reliable solution. 

3. WeGro Technologies Limited

WeGro is a Dhaka-based agri-tech startup that says it aims to “revolutionize the archaic agriculture industry by integrating the latest technology in all aspects of the agriculture supply chain.”

Currently, the company helps “farmers access required finance and market and incorporate quality consumable inputs and modern agriculture knowledge in their farming practices.”

What you need to know 

• Simply put, WeGro connects individual and institutional financiers with farmers and their agricultural projects. The company says it simplifies investing in agriculture. 
• WeGro runs a mobile app-based platform that enables users to facilitate finance for agricultural projects, such as cattle, poultry, fisheries, vegetables, etc. In other words, retail and institutional investors can open the WeGro app, choose a firm/project and invest in it. WeGro uses a shariah-compliant approach to share profit at the end of the firming timeline. 
• The company says it currently works with over 1,000 farmers across 10 zones in the country.
• The company also works with ensuring farmers get agricultural input and has also built an access-to-market business where it buys the output from farmers and sells to its partners such as Chaldal, Parmeeda, Bidyanondo Foundation, Khaas Food Limited, etc while ensuring fair prices for the farmers. 
• Founded in 2021 by Md Mahmudur Rahman and Md. Alvi Rahman, the company raised its initial capital from friends and peers. In October, WeGro announced that it has secured $100,000 from Biniyog Briddhi program’s Impact Ready Matching Fund (IRMF) scheme. 

Why it’s interesting 

The financing gap in the agriculture sector in Bangladesh is staggering. Farmers also suffer from expensive and low-quality inputs, access to fair prices, farming knowledge, and other challenges. While there are several players in the vertical such as Bhalo and iFarmer trying to address various aspects of the same problem, the market is potentially huge and is a relatively untapped market. One challenge is that several models companies like WeGro and others exploring are new and it is hard to claim whether these solutions are what farmers need. But it is fascinating to see companies like WeGro and the bold experiments they are running. 

Endnote  

The observation I shared with Jahaji's profile at the start of this report stands true for all three companies in this list — all three operate in verticals that are relatively difficult and overlooked. You will not find a lot of companies in any of these verticals. There are several agri-tech companies where WeGro operates that offer quite similar services but it can’t be said that there is a proven model or a dominant player yet.

Choosing a boring and complex vertical has many upsides. First of all, it indicates that these founders are willing to get uncomfortable, which is an immensely useful trait in founders. For their companies, since these are relatively challenging verticals — water transportation, on-demand fuel delivery, agriculture financing, and market access, competition will remain limited allowing them enough time to build the market position. If these companies can offer solutions that resonate with their target groups and execute resourcefully, excellent opportunities await them.