Pickaboo, the omnichannel e-commerce platform focused on electronic appliances, mobile phones, and gadgets, announced that it raised $1.5 million in a Pre-Series A round led by IDLC Venture Capital Fund I, and participated by Startup Bangladesh Limited, Sr Infin and Gero. We ran an earlier scoop on the round a while back.
Pickaboo's new funding round comes at an interesting time, both for the company as it gears up for expansion as well as for the overall venture ecosystem as we endure a funding winter.
Pickaboo was founded in 2016 as a mobile-phone-focused ecommerce platform. Operating in a niche coupled with good service, the company had an excellent run until 2019, when it faced an almost existential challenge. It took the company the next three years to come out of that rut.
However, Pickaboo has since turned around its business and established a better operational rhythm. It has evolved and refined its strategy, focusing more on sustainable growth. It has entered physical retail turning itself into an omnichannel player, and broadened product offerings by expanding to new electronics product categories.
Today, Pickaboo stands on a unique opportunity to take its business to the next level. The company enjoys certain unique advantages that come from its recent business model transformation and its experience over the years.
— The omnichannel strategy Pickaboo has developed and scaled over the last several years puts the company in its own category. Given the unique nature of the Bangladesh market, omnichannel can be an effective strategy to scale for ambitious digital commerce companies. Today, there are no other ecommerce players in Dhaka in its vertical with a similar omnichannel scale.
— Omnichannel does several things for Pickaboo. It helps overcome the current ecommerce growth inertia. Dramatically expands the addressable market. And creates self-reinforcing advantages and opportunities for both of its businesses — ecommerce helps its offline business by leveraging the Pickaboo brand reputation and similarly, offline outlets lend credibility to its ecommerce for the customers who don’t know about Pickaboo.
— Marrying online and offline operations can create strong competitive moats. Strategically, it can use offline outlets to create a hyper-local model, reducing friction and improving resource utilization. The convergence is already happening across markets. The model has strategic relevance to Bangladesh given the strength of offline retail in the country and the state of ecommerce. Online lacks relative reliability, and reach. The offline lacks data infrastructure, reach, and tech infrastructure to scale. A synergetic operation can benefit both parts of a business.
— Pickaboo operates in a vertical — mobile and electronic products. The vertical approach has the upsides of focus, brand, and efficiency.
— Starting with mobile and gadgets, Pickaboo has also expanded into new categories including electronics appliances, computers, and a number of similar other products. Done right, category expansion should allow the company to improve its revenue per customer, give customers one more reason to rely on Pickaboo for all their electronics product needs, and cross-sell.
— Near-death experiences in individuals often change them irrevocably. People come out of these extraordinary experiences changed and with new views about life and the world. One change is that they no longer view death from the perspective of fear. They are more accepting of death. The second change is that they develop a greater appreciation for life. They are more grateful. They want to live their life to the fullest. The same can be applied to companies.
Companies that come back from near-death experiences develop greater operational discipline. They are more cautious about repeating the same mistakes and are relatively fearless when it comes to making ambitious decisions. Near-death experiences can help companies develop confidence that can only come from a lived experience.
— Pickaboo not only went through a near-death experience, but the company has quite successfully turned around its business. It has developed a certain operational maturity. Organizational history and tacit knowledge from that experience should enable Pickaboo to navigate future challenges better, avoid common mistakes, and focus on the right things.
— The mobile handset, combined with electronics, is a multibillion-dollar market. The category is also one of the most popular in ecommerce. Despite that, the majority of consumers still shop offline. Similarly, it is a highly fragmented market in Bangladesh, true to the broader nature of retail in the country. Multi-brand retail outlets with good services are not common. These paradoxes offer an opportunity for Pickaboo.
— Pickaboo opened its inaugural retail store on Feb 5, 2020. The company opened nine outlets that same quarter. By the second quarter of the same year, it had built a strong retail operation complementing its online operation. Today, Pickaboo is probably the only omnichannel ecommerce player of its size in the vertical.
— Pickaboo’s physical stores are multi-brand retail stores for mobile phones and electronics products built using a unique franchise model, where Pickaboo jointly invests with a retail entrepreneur partner.
—I’ve written about rampant operational inefficiencies in many early-stage companies before. Labor productivity can make or break any company. Labor productivity has three aspects to it. One, you as a team are working on the things that matter. Second, every member of your team is operating at their best. That’s probably why common hiring advice for startups is that you should always be under-resourced. Third, you should build an operation that is lean and optimized. Pickaboo CEO Morin Talukder told me once that their team size is highly optimized compared to many other companies of similar business size. Pickaboo has built efficiency across its operations by investing in systems and processes. These developments are now paying off by allowing the company to run a lean operation compared to its size.
— Focus on sustainability. Regardless of timing, it is generally a wise decision to think long-term. If not anything, it saves you many short-term mistakes and heartaches. After turning around its business post-2019, Pickaboo has put sustainable growth at the center of its operation. Instead of joining the discount race typical among consumer tech startups, Pickaboo focused on delivering a good experience. It was a tough and unusual call. It took Pickaboo the next few years to settle on the strategy and find a rhythm in it. After four years, sustainability has become a huge gain for Pickaboo. It has reduced uncertainty for the company, allowed it to pursue consistent growth, attract investor interest, and compete effectively.
Final thoughts
This is an interesting time for Pickaboo, armed with a business model innovation, meaningful investment, and strategic category expansion, Pickaboo is looking ahead to an eventful future.
However, good times don't mark the end of challenges. Rather, the opposite. An equally daunting challenging journey awaits the company.
Pulling off an omnichannel operation is fraught with management pitfalls and strategic uncertainties. Similarly, scale brings the challenge of reshaping and scaling the entire operation of a business.
All in all, as the Pickaboo eyes its next round of growth and expansion, the company has its work cut out for it.
