SINGAPORE -- Hussain Elius was still in his mid-20s when the rise of e-commerce in Bangladesh gave him an idea -- a delivery startup to serve the growing needs of online retailers. He and his fellow co-founder set up Pathao in 2015, but soon found another use for their fleet of motorbikes, ferrying not only goods but also people through the notoriously crowded streets up Dhaka.
Thus began Pathao's transformation into a "super app" in the mold of Southeast Asian peers Go-Jek and Grab. The transition has been bumpy at times -- including a battle with regulators to legalize ride-hailing and a privacy scandal involving how its app stored users' personal information.
Elius, however, is confident that his company can become the go-to app for everything from transport to e-commerce and entertainment in the world's eighth most populous country.
One reason for his confidence is that Go-Jek itself, ever on the lookout for opportunities to expand beyond its home market of Indonesia, has taken notice and participated in two Pathao funding rounds.
"Working with Go-Jek is like having a crystal ball because you know what's going to work and what is not going to work," Elius, who also serves as CEO, told the Nikkei Asian Review in an recent interview in Singapore. "They have done this before. So, we learned a lot from them."
Elius has also done a lot of learning on his own. Before setting up Pathao, he experimented with the idea of bringing ride hailing to the nation's legions of tuk-tuks. But the sector is heavily unionized and their tech solution failed to catch on with drivers.
Pathao -- whose name means "send" in Bengali -- made the leap into ride hailing in 2016.
"We were doing deliveries this for a while, very steadily, [with] a few motorbikes," Elius recalled. They soon noticed that there were certain time slots each day when no deliveries were happening, either because people were traveling or were otherwise not at home to receive packages. "We thought, 'Hey, we have a few bikes, what else can we do and how can we utilize them better?'"
Inspiration also came from Elius' own commuting experience in 2014, when he was traveling regularly between home, work and MBA classes via bus and tuk-tuk, an ordeal he describes as traumatic.
"Bangladesh has 180 million people [and] one of the highest densities in the world," the founder said. "Dhaka has 20 million people, and it's half the size of Jakarta, so there's a lot of traffic. We wanted to introduce something that gets people from point A to point B in a fast, cheap and efficient way."
But while expanding from deliveries to ride-hailing may seem logical, the move made Pathao something of a groundbreaker in a country where buses and tuk-tuks were by far the dominant modes of transportation.
"When we introduced the bike taxi in a country without a bike taxi culture, it became very popular," Elius said.
Today, Pathao offers rides on two or four wheels, along with food and parcel deliveries. "We're launching e-commerce" by the end of the year, Elius said, adding that the plan "makes sense" as a next step. "We've been delivering for merchants. That's our original business. And we have a large database of merchants that we are already working with."
Elius said Pathao is also experimenting with a "bunch of digital services and entertainment."
The company faces no shortage of competition. Prominent rivals in Bangladesh include U.S. giant Uber Technologies, which mainly offers car rides, and local company Shohoz, which also claims super app status with ride hailing, food deliveries, bus services and other conveniences. Indian ride hailer Ola, backed by Japan's SoftBank Group, is reportedly eyeing the Bangladeshi market but has yet to enter.
Pathao, which also operates in Nepal's Kathmandu, claims to control 60% to 70% of Bangladesh's motorbike hailing market, with 200,000 registered drivers who rack up 100,000 transactions per day. The company's pre-Series B funding round left it with a reported valuation of over $100 million.
Not only has Go-Jek provided money, it has also mentored Pathao in the rough-and-tumble super app business.
"Back in late 2017, [Go-Jek] shared how great of a business food delivery had been for them," Elius said. "While we were always going to launch food delivery, that prompted us to move ... faster, [and it] also turned out to be a great business for us. They also shared some parts of their food delivery strategy with us."
Go-Jek, Pathao and Singapore's Grab, meanwhile, are all looking to learn from the disappointing initial public offerings of their Western counterparts, Uber and U.S. rival Lyft.
Uber, which posted a $3 billion operating loss last year, and Lyft, which lost $977 million, both flopped when they hit the market earlier this year. Investors are increasingly skeptical of companies that burn cash to grow -- a practice that has been the norm for Go-Jek and Grab in their battle for regional dominance.
Pathao seems aware of the shift in investor sentiment toward prioritizing sustainability.
Elius acknowledged that Uber was spending a lot but insisted this is not happening in Bangladesh. "If the competition is not burning a lot of money, we don't need to burn a lot of money," he said, adding that Pathao is "operationally profitable in our logistics business and in our ride share [segment] as well."
The company has also cut jobs, reducing its payroll to over 500 employees from around 700. "At some point, our tech had caught up," the founder explained. "We have introduced things like bots to support customer complaints, so we just don't need that many people."
Elius maintained the decision was an internal one, but said investors "were supportive."
Singapore-based venture capital firm Openspace Ventures, which has invested in Pathao, believes having a role model like Go-Jek will serve the Bangladeshi startup well. "Pathao has a significant advantage because they have a very close comparable like Go-Jek that can explain to them what are the early things they did right and wrong," said Hian Goh, Openspace's co-founder and general partner.
At the same time, Goh noted that no two markets are exactly alike. "It is still up to Pathao to suss out the subtle differences, or major differences, in the Bangladeshi market. The moment they do that, and the moment they are successful in that, that becomes their secret sauce. I would argue it will be very difficult for any other entrant to come in and assume it can, overnight, replicate the success."
Ultimately, Go-Jek might be the one that learns from Pathao. The Indonesian company now has a window on the nuances of the Bangladeshi market and the broader South Asian region, potentially lowering expansion hurdles.
Go-Jek President Andre Soelistyo, speaking at a Dealstreet Asia event in Singapore, hinted that a move outside Southeast Asia might be in the cards. "For today, Southeast Asia" remains the focus, he said, but Go-Jek is "open minded."
"I think there are a lot of countries, there are a lot of pockets that are interesting to us," Soelistyo said.