A peek inside SHEBA Platform
Launched in 2016, Sheba is known as the local service provider platform. Currently, the startup is now collectively known as Sheba Platform, consisting of sheba.xyz, sManager and digiGO. In 2017, Sheba Platform Limited received The Daily Star ICT Awards in the 'ICT Startup' category. Fast forward 6 years, we talk to Sheba's co-founders Adnan Imtiaz Halim, CEO and Co-Founder; and Ilmul Haque Sajib, COO and Co-Founder, regarding Sheba's current progress and plans for the future.
In 2017, Sheba Platform Limited received The Daily Star ICT Awards in the 'ICT Startup' category. How did the recognition help your business's reach?
The Daily Star ICT Awards was a truly prestigious recognition and it truly boosted us. Afterwards, we won the country's first National ICT Award in 2018. In 2019, when the government started finding startups through Startup Bangladesh, Sheba was the first startup that was selected for funding.
How has Sheba grown as a company in the five years since receiving the award?
Sheba's journey has been quite interesting since its inception. When we received The Daily Star ICT Award in 2017, we were working in a small office in Mirpur DOHS and our team size was below 50. From 2017 to 2022, we grew from a team of 50 to an organisation of 500+. Right now, we are empowering over 1,500,000 small businesses.
What is the financial situation of Sheba right now?
Our total transaction in 2017 was Tk. 2 crores, and it has grown to over Tk. 400 crores in 2022. Our current revenue is around Tk 20 crores now. Despite Covid-19, our annual run rate was 93%. 98% of our investment has been from Bangladeshi angels, venture capitalists and entrepreneurs.
How did Sheba perform during Covid-19?
Sheba's growth period started alongside COVID, but we had to give a break to meet the onslaught of the pandemic. Before the pandemic, our investments were through walk-in investors. However, during Covid, we had to reduce our business as our services involve going into people's houses, unlike e-commerce companies who deliver products outside the door. As a result, we had to shut down our business during the initial wave. We restarted our business after ensuring proper training and precautionary measures for our staff. While Sheba.xyz had a difficult time, sManager did a splendid job during that period.
What is Sheba's stance on bringing in foreign investments?
At the end of 2021, our board decided that we would raise foreign investment. By that time, Sheba.xyz was back in business. sManager was doing great. digiGo has paid licences from 100+ organisations. In 2022, when we went for investments, we received a great response. We didn't realise that we are doing good business. Previously, we had local investors only. Sheba helped create the angel network ecosystem in Bangladesh.
From 2015 to 2018, we took various investments from local angels. Top auditors approved of our methods from the beginning. It was our responsibility to create a benchmark for the market, so that other startups could flourish in the ecosystem.
We travelled worldwide for 7-8 months and during that time, we reached 370+ venture capitalists. We created a funnel of 20+ venture capitalists who were interested in investing in Bangladesh. When we talked about Sheba's due diligence, they found some issues at our end, which we weren't aware of. The first red flag that they gave was that they would not invest in us unless we move to SIngapore. This was because they have some hubs, including Singapore and USA, where they could invest by keeping their compliance costs low. We went for Series A investments and had to ensure that our fund management was up to the mark.
For us, the foreign investment meetings were not only a fundraising exercise, rather it was an international grooming exercise. We have received a lot of mentors through this process who have helped build and shape our business in a better way.
What are some conditions that foreign investors gave Sheba?
Our foreign investors gave us 3 conditions. Firstly, they mentioned that the company must relocate to Singapore. Secondly, they asked the founders to increase their equity in the business. Thirdly, employees must be given Employee Stock Ownership Plans (ESOPs).
In Bangladesh, ESOPs are not a standard practice yet, despite it being a cost effective solution. Here, a company usually gives 100% compensation through cash. On the other hand, foreign companies disburse their compensation through cash and stock options. As a result, employees work hard to increase their returns while improving the company.
What is Sheba's plan regarding its different business units?
Sheba currently has 3 business units: Sheba.xyz, sManager, sBusiness (digiGo). We have created a niche market for each of our business units. Sheba.xyz is still the largest service market in the country. sManager is the only app that helps microbusinesses. digiGo is the first HR mobile manager. All three products have shined in the market.
Each of our business units are run by our Co-Founders. All 3 business units are under the Sheba tech platform. Moreover, we are now creating subsidies. A vital reason for subsidising the business units is that Sheba is becoming a positive company. In June 2023, we will celebrate our 7th anniversary and we want to make all the business units autonomic in nature. We believe in long term success and have a process that will propel our business units further in the coming years.
Do you think Sheba's services came ahead of time for a nascent market like Bangladesh?
We feel that as a service organisation, we came to the Bangladesh market 10 years ahead of time. But we do have the first movers advantage. Sheba.xyz became profitable in 2018 and we have remained consistent with our customers. We did not waste any money but ensured that we maintained quality service for our customers. Sheba is now widely recognised and we try to hold on to that positive reputation with our service.
What is your stance on SMEs?
Nowadays, you will hear a lot about fintech and SMEs. However, we started working with SMEs a long time ago. By the time the consumer market was ready, we were already preparing small shops to become digitised. Instead of experimenting much, we ensured that we kept the quality of our service in a top-notch state. Service is a two-way program. So we started working with our suppliers later in 2018-2019. We observed that the suppliers are not organised in their paperwork and had a poor financial reporting system. After engaging with our suppliers, we decided to pilot a project to ensure that we brought the suppliers up to speed with our system. Thus, we launched sManager, which solved many of the problems of our suppliers.
Our country is roughly 50 years old, and right now, SME contribution is around 25%, whereas developed countries have a 60% contribution through SMEs. We want to play an instrumental role in ensuring the SME contribution towards the economy as Bangladesh is projected to become a trillion-dollar GDP.
The market size is circular and if SME transactions are considered, then we can easily build a sustainable economy. If you can empower SMEs and simplify transactions for them, then the economy can grow faster. We noticed that 1% of businessmen are privileged and know how to figure out everything. For 99%, it's a lack of knowledge and a difficult process for them. We tried to simplify the system for them and tried to solve their problems. We predict that Sheba will touch 2 crore consumers by 2025. Currently, we touch around 60 lakh people every year through our business units to end users.
How is the company culture at Sheba?
We practise a very transparent culture. We share annual financial reports every year with our shareholders. So when there are rumours in the market, the shareholders don't get nervous and remain committed to supporting us, even during a crisis.
What are some challenges Sheba has faced recently?
Last year, we faced our biggest challenge. No one could foresee the investment issue. We did not get any reaction time. It was as if a tornado tore everything apart. We took 3 months to recover. In May 2022, we informed our employees regarding the crisis in a town hall meeting. We mentioned that we will figure out our next course of action and solve the crisis together, despite the major setback. We also helped people who were looking for jobs through various forums and none of them had to sit back for another job.
However, it was during this period that we realised that we have team members who took ownership of Sheba in the same manner that we did. The way they own their work and have grown the company in recent times to greater heights is truly remarkable.
What are some things that you'd like to share with fellow startup founders?
I believe that people need to learn from their struggles and see the challenges that are prevalent when they try to start a startup. We talk about startups when they are successful, but we often leave out the discussion about the struggles that startups face over their lifetime. I feel that the struggles and how they ever overcome should be highlighted in more discussions. Having these discussions help build a thriving environment for founders in their pursuit towards creating a healthy startup ecosystem. In 2015, we were aspiring entrepreneurs who wanted to build something that solved societal problems. We only graduated last year and are still learning new things every day.
Transcribed by Tanzid Samad Choudhury