When facing a severe fund crisis, tech startups in Bangladesh that are heavily reliant on foreign funding are usually sold off at throwaway prices if not compelled to shut down entirely.
But despite facing a similar situation, Sheba has demonstrated resilience by securing funds from local conglomerates and now performing with robust promise.
“We are stronger than ever, retaining most of our employees,” Adnan Imtiaz Halim, founder and CEO of Sheba, told The Daily Star in an interview.
“Our service delivery numbers are rapidly increasing, we’ve secured a payment service provider license, and all our verticals are projecting strength,” he said.
Sheba.xyz, the largest digital marketplace for household services in Bangladesh, underwent an existential crisis in May 2022.
Missing a round of foreign investment at the time, the local startup’s leadership confronted a moment of truth: they had to lay off a majority of their employees and downsize operations for survival.
“For a year, we focused on sustaining, relying on Sheba’s strength and resilience,” Adnan said.
“We plan to reinitiate operations with full vigour between May 2022-2023. Our objective is to formulate a robust comeback strategy, leveraging a minimal workforce dedicated to this venture,” he added.
However, the crisis did not solely stem from the missed round of investment.
After launching in 2016, Sheba quickly captured the attention of urbanites by offering comprehensive solutions to common challenges associated with city living, such as cleaning, plumbing and more.
Operating as an online connecting platform, Sheba.xyz facilitates service solutions for both users seeking services and the service providers themselves.
In 2019, the company launched Sheba Manager, a business app for managing offline and online shops.
The app offers a suite of tools to efficiently manage businesses, encompassing daily sales tracking, balance calculations, and detailed reports on business income growth, among other essential features.
Having gained popularity soon after its release, Sheba Manager currently has about one million users.
Sheba has since experienced remarkable growth, with the demand for its household services soaring to more than 1,000 orders per day.
From 50 employees based in a small house in Dhaka’s Mirpur DOHS in 2016, the company’s workforce expanded to 480 employees in the five years before the Covid-19 pandemic.
However, the onslaught of the pandemic on its operations was hard.
“The initial setback to our business came from the pandemic. We were compelled to suspend our household service entirely for several months,” Adnan said.
“But the bright side of that gloomy time was that we provided 50,000 small business with food and financial assistance while Sheba Manager emerged as a very useful tool for them as well,” he added.
The crisis escalated when an almost secured investment fell through as Sheba is not registered as a company of Singapore.
“We could not obtain legal clearance for the funds because of this,” Adnan said.
As a result, Sheba was blindsided by a significant investment shortfall, which was like a “sudden storm” hitting its operations.
“We convened a town hall meeting to transparently address this crisis with our team. It was a time of great uncertainty, but we were committed to facing these challenges as a united family,” he added.
Adnan candidly recalled the struggle inside the startup at the time.
A colleague struggled to pay his child’s school fees and another was on the brink of defaulting on a loan.
“We also had regular service providers on our platform who were struggling to make ends meet. We faced these challenges head-on, prioritising the needs of our people within limited funds,” he said.
“Our efforts were directed towards ensuring that each individual received the support they needed,” Adnan added.
After one year of struggle, Sheba once again got backing from some top local conglomerates and started over again.
“We are resolute in our determination to bounce back, even in the face of a powerful storm. We have not faltered, and the 60 individuals who stood by us are just as determined as I am,” Adnan said.
He also said Sheba has already disbursed Tk 7 crore in outstanding salaries and payments to vendors, bringing the company close to settling all pending payments.
“We firmly believe in the future of this company. Witnessing Sheba’s profound impact on people’s lives and the positive changes it has brought reinforces our confidence. Experiencing a single financial setback does not necessarily imply a dire situation,” Adnan added.
He credited Sheba’s board and shareholders for the comeback.
“Their unwavering confidence and consistent support during challenging times have played a pivotal role in our turnaround,” he said.
According to him, Sheba is a completely locally funded company unlike most other startups.
It raised about Tk 70 core from local backers as of May 2022. Since May 2023, it has secured funding of Tk 32 crore from some local backers in a series A round, taking its total funding to Tk 102.
It plans to raise another Tk 18 core from other local backers in the coming weeks, taking its overall series A round investment to Tk 50 crore.
“In the latest round, BSRM Group, a leading steel manufacturer and one of the largest conglomerates of the country, entrusted their confidence in the impact that Sheba is creating for small merchants and the economy by becoming the latest investors,” he said.
“Besides, Startup Bangladesh Limited is again investing in this round, showing their faith on the concept that is Sheba,” Adnan added.
As the operations of the company is expanding, it started hiring since May this year and now has more than 350 employees.
In August this year, it secured a Payment Service Provider (PSP) license from the central bank to launch Sheba Pay.
The Sheba platform is now working on creating an ecosystem for small and medium enterprises (SMEs).
“Already, 35,000 SMEs have used our payment platform,” he said.
Adnan also said the landscape of SMEs, including micro businesses, in Bangladesh is brimming with potential.
“Over the past 10 years, we’ve seen the number of SMEs grow to 10 million. These businesses are more than just numbers; they’re the lifeblood of our economy, with a projected contribution of $500 billion by 2041,” he said.
With Sheba Pay and the Sheba Ecosystem, the company is positioned to help these SMEs flourish and grow, creating a more inclusive financial environment in the process, he added.
Apart from simply doing business, Sheba’s dream is to enhance consumer experiences with innovative products and services.
Adnan said Sheba is more than just a service delivery platform for users.
“A child got trapped in a bathroom when the door malfunctioned. The mother then contacted us, and we successfully rescued the child within 30 minutes,” he said.
Similarly, a newlywed couple faced car trouble at night in the outskirts of Dhaka, and Sheba’s technicians promptly resolved the issue.
“So, Sheba is cherished by people for problem-solving,” Adnan added.
Adnan also said that Sheba has had an impact beyond its customers.
“I know a plumber that would earn just Tk 12,000 monthly. Using Sheba, he built a team and uplifted his earnings tremendously,” he added.
Now, the plumber owns two sanitaryware shops, and resides in a comfortable flat.
“Besides, it is an immense pleasure for me to witness that he now sends his child to a good school,” Adnan said.
“At Sheba, we not only aim to solve problems, but also support lives and livelihoods,” he added.