Ant Financial is currently in talks to invest in Bangladesh-based ride-hailing and bus ticketing platform Shohoz, according to people familiar with the matter, a move that follows its investment in mobile fintech startup bKash announced in April this year.
An Ant Financial spokesperson responded to us saying the firm did not comment on market rumours.
Alibaba and its affiliate Ant Financial have ramped up investment efforts in South Asia. In the wake of their investments in India’s Paytm and Snapdeal, the duo now expanded their search to Bangladesh, home to 163 million people and a booming IT industry, one that’s expected to grow five-fold by 2025.
In May 2018, Alibaba acquired Daraz, an e-commerce group covering Bangladesh as one of its five markets.
Founded in 2013 by ex-Harvard Business School alum Maliha Quadir, Shohoz’s holding company is incorporated in Singapore. It launched its bus and ferry ticket booking platform in November 2014. Its on-demand motorbike taxi service launched in January 2018 and competes with local ride-hailing firm Pathao, which launched an on-demand motorbike service in 2016, and Uber Moto, which still operates in Bangladesh.
According to a pitch deck dated back to April we obtained, its ride-hailing service averages around 11,000 rides per day within 13 weeks of launching it in Bangladesh.
Shohoz, which translates to ‘easy’, has onboarded 18,000 drivers and recorded a gross transaction value of US$1.8 million in 2016 and US$3 million in 2017 for its tickets business, according to the deck. It also says the startup is looking to raise a Series B round of $5 million.
While Shohoz started off as just a ticketing platform for commuters, it wants to add categories in “higher margin services like food, parcel, and consumer goods” and flight tickets, by 2021. In August this year, Shohoz signed an agreement with Ant Financial-backed bKash to help drivers and riders make and receive cashless payments. In its investor deck, Shohoz said about 70% of payments are already made through mobiles.
Competitor Pathao raised a pre-Series B round of over US$10 million led by Indonesian on-demand company Go-Jek in April this year. It already has its own mobile wallet for payments, offers rides on two and four-wheelers, does food delivery and last mile logistics.
Mobile wallets are a huge opportunity in Bangladesh, where around half of the adult population do not possess a bank account or mobile money account, said a World Bank study.
Many Chinese tech firms have started looking at Bangladesh as an opportunity to acquire new users, generate revenue and strengthen their global influence. Huawei, for example, has conducted a 5G trial in Bangladesh. Tech entrepreneurs in Bangladesh are receptive to raising money from or fostering ties with Chinese companies, said a report in Chinese media outlet Xinhua. The two countries are also reportedly working together to build more economic zones and tech parks.
The story has been updated to include Ant Financial spokesperson’s response to our request for comment.
Editor: Nadine Freischlad