Nuport: The Dhaka-based SaaS startup targeting the $8 billion e-commerce industry in Bangladesh
Fahim Salam and Christopher Li were working on a digital logistics company with an ambition to disrupt the e-commerce logistics space in Bangladesh. The idea was a result of their own earlier hurdles with logistics while building an e-commerce company. While working on the logistics, the duo realized that there was an even bigger challenge: supply chain automation for enterprise and e-commerce companies in Bangladesh.
Why not? E-commerce is said to be an $8-billion dollar market in Bangladesh. Unlike many other markets, it is a unique market in which small Facebook and social media-based players dominate the bulk of the business. Most of these players run their operations manually and consequently, face a significant bottleneck in managing and scaling their businesses. Heavy reliance on staff to run the operations makes everything inefficient and expensive.
E-commerce companies generally rely on a multitude of channels, including their website, social media pages, third-party e-commerce marketplaces, and IP phone calls, to receive orders. Since these companies run their operations manually, it takes herculean efforts to manage orders coming through all these disparate channels.
While orders are collected through the websites and Social media pages, on the backend it is often an Excel sheet and humans purging data and setting things straight.
Over-reliance on manual processes makes growth costly, slows down operations, hampers customer services, and makes scaling almost impossible.
Order management is only one aspect of their operations. A multitude of other small and big aspects are involved including logistics, warehousing, finding the right suppliers, and the list keeps going.
For instance, information rarely flows freely from one department to another. It often needs to be relayed manually from one person to another, which slows everything down, impedes automation, and turns phone calls into the only medium to connect various parties.
Many large e-commerce companies have managed to automate some aspects of their operation but not entirely. These companies have systems, but those systems are rarely integrated. Then it becomes the same problem as two people who are not connected. They have warehouse management software that only warehouse guys know. The guys in logistics have their separate software. Nothing connects with anything.
The next challenge is even more pressing. Business is all about making good decisions, fast. Management needs to make quick decisions based on real-time data. But as you grow, access to information can become a challenge if you don’t have a system in place. That’s usually what happens with these companies. The lack of an automated data management system makes insight inaccessible. Many companies go around hiring analysts who do some pivot tables inside Excel sheets and come up with reports for different departments, which usually is too late. You need to know what products are working and what are not as fast as possible so you can make changes. However, these things can be automated and made real time. And real-time access to intelligence can transform any business. It can improve operational efficiency and ensure superior coordination.
Enter Nuport: An Unfolding Opportunity
This is the context where Nuport, a Dhaka-based ambitious full-stack supply chain automation company, comes into the story. Founded in 2021 by Fahim Salam and Christopher Li, the company builds tools and applications for e-commerce and distribution companies to automate their entire supply chain and back office so that these companies can scale and grow faster and more efficiently.
Fahim Salam and Christopher Li were working on a digital logistics company with an ambition to disrupt the e-commerce logistics space in Bangladesh. The idea was a result of their own earlier hurdles with logistics while building an e-commerce company. While working on the logistics, the duo realized that there was an even bigger challenge: supply chain automation for enterprise and e-commerce companies in Bangladesh.
Why not? E-commerce is said to be an $8-billion dollar market in Bangladesh. Unlike many other markets, it is a unique market in which small Facebook and social media-based players dominate the bulk of the business. Most of these players run their operations manually and consequently, face a significant bottleneck in managing and scaling their businesses. Heavy reliance on staff to run the operations makes everything inefficient and expensive.
E-commerce companies generally rely on a multitude of channels, including their website, social media pages, third-party e-commerce marketplaces, and IP phone calls, to receive orders. Since these companies run their operations manually, it takes herculean efforts to manage orders coming through all these disparate channels.
While orders are collected through the websites and Social media pages, on the backend it is often an Excel sheet and humans purging data and setting things straight.
Over-reliance on manual processes makes growth costly, slows down operations, hampers customer services, and makes scaling almost impossible.
Order management is only one aspect of their operations. A multitude of other small and big aspects are involved including logistics, warehousing, finding the right suppliers, and the list keeps going.
For instance, information rarely flows freely from one department to another. It often needs to be relayed manually from one person to another, which slows everything down, impedes automation, and turns phone calls into the only medium to connect various parties.
Many large e-commerce companies have managed to automate some aspects of their operation but not entirely. These companies have systems, but those systems are rarely integrated. Then it becomes the same problem as two people who are not connected. They have warehouse management software that only warehouse guys know. The guys in logistics have their separate software. Nothing connects with anything.
The next challenge is even more pressing. Business is all about making good decisions, fast. Management needs to make quick decisions based on real-time data. But as you grow, access to information can become a challenge if you don’t have a system in place. That’s usually what happens with these companies. The lack of an automated data management system makes insight inaccessible. Many companies go around hiring analysts who do some pivot tables inside Excel sheets and come up with reports for different departments, which usually is too late. You need to know what products are working and what are not as fast as possible so you can make changes. However, these things can be automated and made real time. And real-time access to intelligence can transform any business. It can improve operational efficiency and ensure superior coordination.
Enter Nuport: An Unfolding Opportunity
This is the context where Nuport, a Dhaka-based ambitious full-stack supply chain automation company, comes into the story. Founded in 2021 by Fahim Salam and Christopher Li, the company builds tools and applications for e-commerce and distribution companies to automate their entire supply chain and back office so that these companies can scale and grow faster and more efficiently.
Nuport’s solution for e-commerce companies starts with an integrated robust order management solution it calls Dynamic Order Management that allows e-commerce companies to automate their entire order management, reducing both cost and time.
Most e-commerce companies have multiple channels such as social media pages, emails, websites, third-party marketplaces, and phone calls, through which they receive orders from customers. These disparate channels make order management and fulfillment a challenge.
This is where Nuport comes in. Nuport’s order management tool helps e-commerce companies to streamline their disparate order management by bringing all their orders from different channels to a centralized interface. If you have a website or a Facebook page, you can integrate the Nuport system and automate your entire order management process.
Order management is only one part, the built-in inventory management system ensures the availability of products without back-and-forth human interventions. A separate warehouse management system helps companies find warehousing facilities.
A transport management system (TMS) addresses logistics needs. The Nuport transport management system has both internal and external fleet management options. If a company has its own vehicles, it can integrate that into the Nuport system. External fleet management option allows companies to connect to third-party logistics companies. Nuport has built integrations with some of the leading e-commerce-focused 3PL players in the country including Pathao Courier, RedX, PaperFly, eCourier, and Steadfast, and is working to add more logistics providers.
Nuport’s integrated system not only improves the efficiency and speed of a company. It also dramatically empowers companies to access and better use their business intelligence. Companies can see various parts of their operations — from orders and demands to logistics to warehousing — in real time. It means important business intelligence is readily available without additional investment to purge and analyze data, which can offer lasting growth and competitive advantage to any business.
Micro-module: Simplifying Complexity
Given all it does, Nuport’s product can appear complex to many people. How can a simple SaaS supply chain automation product do so many different things? It can even remind some people of the dread of big and bulky infamous ERPs which many industries in Bangladesh are known for. ERPs that many companies buy but rarely take full advantage of.
Nuport has used a clever product strategy to not only simplify its products but also make them affordable for its target customers; who are mostly small and mid-size e-commerce companies.
“Our product doesn’t have a learning curve,” assures Fahim Salam, Co-founder and CEO of Nuport. “When our customers use our software, they're not doing anything different. They were already adding orders to an Excel sheet before. They are now doing the same thing but this time, it is an Excel sheet that fills itself automatically with data. That Excel sheet is connected to an inventory Excel sheet, which also gets updated automatically. Another Excel sheet takes care of all the logistics requirements. The system is also able to predict how fast or slow events are changing and notify its users. These are systems that they are already used to. We’re just giving them a platform where most of these things happen in the backend. I would not say a zero learning curve, but maybe seven days to figure out everything because they've already done the hard work in the manual system. The automatic system is just a matter of integration.”
Being a full-stack supply chain company allows Nuport to build unique relationships with its customers. It can start with solving one aspect of a problem that a customer is facing and move up gradually. For instance, for someone facing the challenge of order management, Nuport can simply be an order management solution first, followed by inventory and shipping.
“We don't usually sell anything to our customers,” Fahim says, explaining Nuport’s go-to-market and customer acquisition approach. “Instead, we ask about their problems. We're a full-stack supply chain automation company. We know the problems in and out. All we have to do is listen to them. We do the basics first, which is fixing their order management. Once that is done, I've done my part. I don't have to tell them anything. They start asking us, “Can you fix my inventory?”, “Do you have a transport management system?”, “I just bought three vehicles or I use 3PL that doesn't integrate with my order management, can you help us with that?” My job is done at that point.”
Nuport works with companies that are trying to take their business to the next level, but aren’t able to do so because of technical bottlenecks. Many companies struggle to scale beyond a certain size because they are not able to automate their operations.
“We started this company to be the go-to supply chain technology partner for any business that is willing to scale,” explains Fahim. “The majority of the scaling problems were usually faced by really large companies, because of the fact that their entire distribution was very disconnected. Their order management, warehousing, planning, fleet, everything was siloed into different compartments, which is why it was very difficult to get information from one department to another. And that was the problem that we decided to solve for large organizations.”
But the company has since shifted gear to focus on small and mid-size e-commerce players who are looking to scale. One of the reasons for the shift is strategic. While Nuport has an excellent enterprise product, the company realized that it doesn’t want to be a mere SaaS product, rather it aims to build a networked platform. To get there, it needs the network effort to play out in its favor. And it can only make that happen if it works with a large number of e-commerce players who can support it with the power of demand aggregation to bring other stakeholders to its platform.
This was a fascinating move. Let me back it up for the sake of clarity: Nuport started by targeting large enterprises, and while doing that, the company figured out that there is an even bigger opportunity — solving for the small and medium size e-commerce companies. E-commerce is a growing trend in Bangladesh. The company reasoned that if we could help these companies to manage their business more efficiently, automate their processes, and connect them with different stakeholders, they will be able to grow and scale much faster increasing the growth rate for the whole industry.
Nuport saw an even bigger opportunity in e-commerce. No other player was targeting huge scale-bottlenecks that these companies were facing in an aggregate and systematic manner. The Nuport team got interested in the question of “how we can enable these companies to stay in business and stay competitive,” adds Fahim. “That was the ethos that allowed us to kind of shift our strategy a little bit.”
With the shift, Nuport has simplified its solution and made it micro-modular. Companies don’t need to buy the entire solution. Instead, you can only subscribe to the modules that you need the most.
“It's very micro-modular,” explains Fahim. “We're not going to give you the whole thing. You use only what your business needs. When your business is generating one crore in monthly revenue, you need a certain set of tools. A few years later, when your business reaches 10 crores a month, you're gonna need a more advanced set of tools. It is based on your needs and you can add as you go.”
The Market
In the past, I’ve written that great organizations are built on shifting landscapes — unique insights, changing markets, and new cultural transformations. When you combine these forces, you invariably come up with a recipe for building fascinating organizations.
One of the greatest shifts in the history of business is the current shift to rapid digitization of our lives.
Like every other aspect of our lives, commerce has been moving digitally at an unbelievable speed. This has resulted in giants like Alibaba, Amazon, Flipkart, and an endless number of other hugely successful companies.
The global e-commerce market is estimated to be worth around $5.9 trillion in 2023. There were over 26 million e-commerce companies in the world in 2022.
In Bangladesh, that transformation is happening right now and it has taken a unique shape in that it is mostly dominated by the small players. And it is likely to remain so. This offers a huge opportunity for a company like Nuport.
“In Bangladesh, there are some 3000 active e-commerce brands, apart from Facebook-based sellers,” explains Fahim in response to my market opportunity question. “Say another 50,000 Facebook-based sellers. That is the target market, at least for the E-commerce site and the SMEs. The whole e-commerce industry today is projected at about $8 billion dollars, and it's estimated to go up to $17 billion in the next three years.”
From a high level, at least, it’s easy to feel bullish about Nuport’s potential. The platform is positioned to be one of the primary beneficiaries of the digital transformation for the country’s e-commerce landscape. It will not capture all of the value created in this process, of course – many other innovations will be needed. Moreover, it will just be a facilitator built on the back of the fast-growing digital commerce like many other similar businesses. But as a SaaS product and platform through which many of these e-commerce companies will operate, Nuport is well positioned to capitalize on a growing need.
These opportunities only cover part of Nuport’s current opportunity. Even at this stage, a player like Nuport, which likely clips just a few percent in subscription and commission fees, could still build a large revenue stream. That should only increase as digital commerce grows and Nuport manages to grow its dominance across logistics, warehouses, and various other corners of the digital commerce ecosystem in Bangladesh.
The product: A digital Commerce OS Masquerading as SaaS
“We're a classic SaaS player,” explains Fahim. “We aim to be the largest cloud SaaS player in Bangladesh. We have three tiers of monthly subscriptions for customers: 5000 taka, 10,000 taka, and 15,000 taka. The pricing depends on the number of orders and 8the number of modules that you need. The more complicated your business is, the more expensive it gets because we have to deploy more cloud resources into your application. For starters, it is quite inexpensive if you compare the value.”
Nuport’s product is best understood by the problems it solves for e-commerce companies: order management, shipping, networked warehouse management, and business intelligence.
If you are an e-commerce company, you can do all these things using Nuport.
Nuport has built extensive integration with a large number of existing softwares and platforms, a superpower for any software product. You can integrate Nuport with WooCommerce stores. Nuport is also the first Shopify partner out of Bangladesh and integrates with any Shopify store. Additionally, Nuport offers integration with any other platforms that create websites or landing pages as long as they have an API.
The company plans to add more solutions in the coming days. The ambition is to make an e-commerce operation easy, scalable, effortless, and inexpensive.
Overview of the Company
Nuport is currently a team of 35 people. The company says it has over 120 customers and growing.
Nuport has five products: Dynamic Order Management, Automated Distribution Planning, Smart Warehousing, Supply Chain, and E-commerce Suite.
Nuport’s primary source of income is the subscription fee customers pay to use its SaaS platform. The company currently offers three tiers of subscription options. It also provides custom packages for companies that may need additional support.
Although Nuport didn’t disclose these plans, in the near future it should be able to monetize its platform and earn additional commission or subscriptions fee for working with other service providers. It means various transactions that occur via the Nuport platform can provide a secondary revenue stream for the company.
In the interest of simplicity, we can divide Nuport’s revenue streams into two segments: subscription fees and platform revenue. To be clear, while Nuport has a growing subscription revenue today, the company currently does not charge any platform revenue yet. Platform revenue will kick in when network effects start to take shape with a larger audience.
It is important to understand that, treating Nuport's current revenue misses the point given the company’s ambition to build a platform.
Nuport has offices in Dhaka, Dubai, and Delaware, US. It has so far raised over $600K in disclosed investment from a number of local and international investors including Iterative, Tofino Capital, South Asia Tech Partners, Mashfique Hossain Chowdhury, AngelList, On Deck, and Flexport.
Over the last one year, the company has been super focused on growing the business, improving its bottom line, and being frugal amid the tough economic environment. However, it has also been planning to raise further capital to fuel its growth.
Competitive Position: Relentless Dynamism as Enduring Moat
There are several players in the space. However, none offers a comprehensive product that matches Nuport’s features and capabilities. Some of these players focus on one specific aspect of the entire problem such as order management. Others are looking into other aspects such as warehouse, logistics, etc.
The strength Nuport has is that it offers specific solutions to different yet related problems its target customers face on a regular basis.
For instance, Nuport has an order management solution that companies can subscribe to separately. The added advantage for Nuport is that it also offers other solutions such as WMS, and TMS that companies usually need when they scale. It means a small company that starts with Nuport for one solution has no reason to stop using Nuport when they grow. This scales Nuport's ability to retain customers, while significantly reducing its acquisition costs.
The two advantages Nuport enjoy are the domain knowledge of its founding team and a culture that is obsessed with customer service. These are what I call dynamic moats. In a constantly changing world and highly competitive environment, no innovation lasts long. Your competitors will eventually catch up with your product innovations. What is almost impossible to beat is a unique insight into the market that comes from deep domain knowledge and relentless cultural dynamism.
“I guess what makes us different is the fact that we are not just mere engineers,” says Fahim. “We come from a background in operations. We have a deep understanding of the problem.”
The distinct culture of Nuport can also be a strong moat for the company. Customer
obsession and horizontal structure are hard to replicate if they are not ingrained in the cultural DNA of a company. The company has also built a decision-making process that is decentralized.
These advantages are likely to allow Nuport to stay ahead in the market as the market changes and competition grows.
The Challenges and the Opportunities
The primary challenges for Nuport come from four sources: managing growth, improving the product, educating the market, and the current tough economic environment.
Fahim acknowledges all these challenges. “We need to hire customer service people as fast as possible,” says Fahim. “We had challenges with scale technology and training our people, we took care of that. As an internet business, people sign-up for our services all the time. How fast we can onboard them is important for us.”
Another setback for Nuport is that we’re going through a difficult global economic
environment, which makes fundraising a challenge. The company would have benefited from a more favorable funding landscape where raising money was easier and thus investing in aggressive growth. The current landscape, however, calls for prudent operational decisions. Similarly, the challenging economic environment can also make Nuport’s B2B customers cash-conscious; potentially reducing demand for its own products.
The other challenge for the company is educating the market. While e-commerce is a growing market in Bangladesh, it is fragmented and dominated by smaller players many of whom Nuport might find difficult to convince to use its product. The positive news is that Nuport has already made some inroads. Positive word of mouth could create potential positive market momentum for the company. Interestingly, Nuport is laser-focusing on that for its next level of growth.
“The next set of growth is entirely going to be based on customer service, the better we are at resolving issues with our customers, onboarding, signing up, and listening to them, the better it is going to be for Nuport,” says Fahim in response to my question about the company’s next growth flywheel. “The natural progression after getting to 500 customers will be to keep up with their scale because many of them will need more hands-on services.”
The Future: Between Pragmatism and Grand Vision
Nuport has a number of short and medium-term goals going forward. The company was founded in 2021, as we discussed earlier, although Chris and Fahim had been working on the idea even before that. Within this short time, it has achieved significant progress. It has received backing from a number of prominent investors, which is a validation of the importance and potential of its ideas. It has also managed to build an excellent product and triangulate an excellent growth flywheel that has already been put on a solid growth path moving reliably up and to the right.
In more material terms, Nuport wants to grow its business in Bangladesh and once it has a sizable business, the company plans to expand internationally. “Within the next three years, we expect to be international,” adds Fahim.
Nuport has built a state-of-the-art technology stack to address the challenges in Supply Chain Automation. The company commits to continuously improving the technology to serve its customers better.
On the vision side, the company aims to go further and put its technology network to work and make starting and growing e-commerce companies predictable in Bangladesh.
“We are targeting this $8 billion e-commerce industry in Bangladesh,” says Fahim. “We are trying to automate and reduce all the frictions that are there, integrate with all the local players, and thereby help Bangladesh increase its GDP.”