Bangladeshi ride-hailing startup Pathao is in talks to merge with SureCash, a local digital payments provider, according to multiple local reports.
According to The Daily Prothom Alo and Future Startup, the two companies have entered advanced discussions to consolidate. The merger is expected to place them in a better position to attract funding and provide a wider range of services to its customers. The reports add that the two companies will continue to operate independently after the merger.
Pathao declined to provide DealStreetAsia a comment for this story.
Both Pathao and SureCash are understood to share Osiris Group as a common shareholder. According to Crunchbase, Osiris Group last invested in SureCash’s $7 million Series B round in 2015. The frontier markets private equity firm also joined one of Pathao’s early fundraising rounds as an investor.
Pathao ran into cash troubles earlier this year after it came up short of securing its targeted $50 million Series B round. The company retrenched nearly 300 mid to top-level employees, restructured its operations and announced plans to postpone its Series B final close.
The Dhaka-based startup had raised $10 million for its pre-Series B round in April 2018, securing capital from Gojek, Openspace Ventures and Battery Road Digital Holdings.
Fundraising remains a major challenge for frontier markets like Bangladesh.
In an earlier interview with DealStreetAsia, Pathao’s chief operations officer Pardeep Grewal shared that the hurdles are even greater for pioneers in an unproven market. Most investors tend to have an “India-only” mandate when it comes to investing in South Asia, leaving neighbouring markets like Bangladesh highly misunderstood as a destination for capital.
Pathao or “send it” in Bangla was founded in 2015 by Hussain Elius, Fahim Saleh and Shifat Adnan. The company started as a courier service for e-commerce merchants in Bangladesh, before branching out into other verticals like food delivery and ride-hailing. It counts players like Uber and Shohoz, a Golden Gate Ventures-backed local startup, among its competitors.
