Fetchr's Series C funding round: The road to redemption
Fetchr, a delivery and logistics platform that helps local merchants and global brands build, launch, and grow profitable e-commerce and online businesses, recently raised their $15M funding round. The startup that was almost on the brink of collapse and had considered selling the business or filing for bankruptcy last year, has massively turned things around, putting all eyes of MENA's startup ecosystem on them. How did they do it? What saved them? How can I learn from this?
Ahmed Usman, Head of Operations - UAE at Fetchr answers these questions by sharing his key learnings and takeaways from the 'rollercoaster' experience. By doing this, Ahmed shared with MAGNiTT what he hopes future entrepreneurs or struggling startups will gain from his insights, "The most important lesson I want all readers to takeaway is that you only lose when you give up, as a leader it is your job to fight until the end, and give it your best shot regardless of the situation. I am a firm believer there is no shame in failing as long as you give your best and fight your way through it. In many cases, several entrepreneurs will give up easily without putting up a fight when facing an existential crisis.
"Given that many startups face similar challenges, I believe this story has to be shared with the MENAP startup ecosystem with the hope that other entrepreneurs/leaders might take inspiration from what we managed to achieve through the turnaround at Fetchr."
Fetchr's latest funding rounds:
For many people, Fetchr's Series C announcement may have been just another fundraise press release but for me, it was a vindication of the belief we had in December 2019 when we were struggling to raise the round, that we will manage to turn things around. The odds were heavily stacked against us; we were bleeding badly, had very limited/no $ runway and the on-set of COVID-19 (the Black Swan of 2020) seemed as if the universe was conspiring to derail any turnaround plan we had. Fetchr's turnaround will make a compelling business school case study and any entrepreneur or startup contemplating about pulling the plug should take inspiration and lessons from it.
Here are some key learnings that I would like to share from this experience:
You only lose when you give up
This sounds like a cliche but in reality, when your back is up against the wall, the only thing that will enable you to fight back is having the self-belief that you will be able to turn things around and that you should never give up without putting up a fight until the end. If you happen to be in a leadership position, this applies not only to you as a person but you also need to ensure you instill this mindset in your team. The best way to do that is by being transparent of the situation at hand, having a clear plan, being ruthless in execution, and projecting optimism (even in the darkest of periods).
You will have to make tough decisions
Any turnaround plan will involve difficult steps (there is no sugar coating it). You will have to part ways with colleagues, take pay cuts, optimize - do much more with much less, shut down markets, sell assets, etc. Without taking these bitter pills, there is no other way to turn things around. You need to analyze what were the mistakes you made in the past, breakdown every problem to root cause level come up with a strategy to fix it, and ensure that every member of the team is aware of the plan and the role they have to play in order to execute it flawlessly.
Build a support system around yourself
Any startup turnaround will be a rollercoaster ride and will for sure have an emotional toll on you as a leader/team member. There will be many people - your friends, ex-colleagues talking/sharing WhatsApp messages about your imminent demise, the media will publish stories predicting your downfall. The negativity will be overwhelming and the scrutiny will be unforgiving, its imperative you surround yourself with people who you believe in you as a person and a professional. I was lucky to have an extremely supportive small core group of family, friends, and colleagues who I could rely on during the darkest periods. Their positivity and support will be the fuel you need to power your self-belief and be in the right headspace/zone to function at full productivity.
Push yourself and everyone in your team to the limits
When I got the opex/headcount target for UAE from the leadership team, the first question I asked them related to the baseline volume we were looking at. The answer I got was that baseline volume will remain the same if not more, which meant that we had to implement an ops revamp plan that would deliver a dramatic increase in productivity at every level.
There is a very high likelihood you would probably have to come up with similar plans when facing an existential crisis. Everyone (including yourself) will initially be scared by the intensity of the new normal, but the more you and your team will go through the grind, the more you will be battle-hardened and after some time, you will get used to this new high bar of performance and productivity (the grind serves a dual purpose: it weeds out the low performers automatically and you will be left with your A-team.)
You and your team will only discover this undiscovered/underutilized potential when you pit yourself against the odds and push yourself to the limits. The approach that worked for me was, we broke down the overall goal into multiple mini-goals (looked less intimidating but were equally difficult to achieve,) but once you start achieving these mini-goals, you build momentum and you need to leverage this momentum to gradually increase the tempo till your goals are met.
The best way to track performance is by breaking down targets. In my case, we were tracking everything on a daily basis, incremental daily performance added up into incremental weekly performance and incremental weekly performance added up to incremental monthly performance which added up into incremental quarterly performance.
Culture eats strategy for breakfast (talent is key to execution)
You can come up with the best of plans, but if you do not have the required team (with the require mindset) to execute it, they will be laid to waste. The easiest way to ensure you have a high chance of success while executing your turnaround strategy is to build a high-performance culture. As a leader, you need to make sure you only retain the best talent and the bar should be high. It has a two-fold benefit: you end up saving cost on resources that were not adding enough value and everyone left on the team feeds off the latent energy creating a performance-driven culture.
The most difficult act
When being faced with an existential crisis, the first thing your board/management will tell you to do is to reduce costs and the first cost line item they will focus on is salaries/payroll. You will face the inevitable task of right-sizing your startup/team by identifying which team members you will retain and which will either be reassigned to a different role within the organization (a very low probability event in all likelihood) or will have to be off-hired (most probable situation.) Only experience can help you prepare for this event. Having done this exercise a few times, these are some key things that have made the process more human (for myself and the ones impacted by the re-org):
- Be transparent in terms of setting out the criteria
- Humanize the process and treat them with dignity: you need to inform everyone impacted in person. Have a 1-1 with direct reports or people who have held key positions in your teams. Remember this is as much about the folks impacted as it is about those left behind since they will all be having a ringside seat to see as to how their ex-colleagues were treated for something they were not responsible for. Informing people over a zoom call is a terrible idea (regardless of the circumstances) and will never fly with any team where you are trying to build a high performing culture
- Come up with a glide path: The two things that will help those impacted the most are, emotional support: instilling in them the belief that all will be fine in the long run and that this is just a small road bump in their long professional journey. Secondly, give them actionable help: e.g. brush up their CVs, give them feedback for how to best utilize this time and upskill and provide leads where they can apply for jobs, refer them actively to any opportunity where you believe they will add value. The best example we saw in the region was the xCareem - candidates and opportunities google doc.
It is not the end of the world
There is a high likelihood that even the best of plans (executed to the tee) will not result in you achieving to save your startup. We at Fetchr and the transformation team at Gate Capital worked very hard but I still believe we are very fortunate to have been able to raise a round in the midst of the worst pandemic recorded in recent human memory. Some other startups were not so fortunate and were pummeled due to the adverse business environment and investors holding on to their cash.
It's okay to fail, the key being that you should give it your best shot and fight until the end. The experience itself will make you wiser provided you reflect, learn, improve, and implement the learnings from this process.
I firmly believe, Fetchr 2.0 will be a force to reckon with. The closing of the Series C is not the end but the beginning of a new chapter in Fetchr's growth story. With a new leadership driving a customer-obsessed mindset within the organization, Fetchr is poised to bring a paradigm shift within the logistics space in the region and beyond. We are open for business and eager to be the best logistics service providers; feel free to reach out in case you have any queries as to how we can help solve your logistics needs.
Pakistani startups saw $18M invested in H1 2020, with the overall number of deals increasing by 13% to 17 deals from H1 2019, illustrating the potential of Pakistan to become the next big South Asian entrepreneurial hotspot. Discover more trends in our H1 2020 Pakistan Venture Investment Report.