Bangladeshi tech startup Shohoz has reportedly decided to close its ride-sharing and food delivery services wing from October 31 as the company continues to struggle to make profits, company insiders said.
Talking to The Business Post, a senior official from the company’s food delivery service wing said, "Our truck booking service has already been closed, and the process to shut down some other services is currently underway as the company has been struggling to make a profit.”
The company also reportedly sacked about 50 employees, mainly from analytics, operations and some other departments, as part of its plan to shut down the two services.
Several employees claimed that termination letters were served to them mentioning October 30 as their last working day.
"I have been working for three years in their food wing as a senior executive, and the termination letter came to us as a process of shutting down some of our operations," one of the employees said on Wednesday.
They also expressed fears that the company would axe more employees from other sections such as truck rental services, ticket booking, education and health.
In a statement to The Business Post, Shohoz said its board was reviewing the strategic vision with current wings and future potential ones.
"As part of that review, we have stopped our truck booking vertical because it's non-core and not synergistic to our consumer verticals," the company said.
Farhat Ahmed, the public relations manager of Shohoz, said, "Covid-19 lockdowns transformed the ride-hailing industry with drivers going offline. We kept our ride-hailing services off during the pandemic in compliance with the government’s regulations. We are now reevaluating how and when to launch it."
He declined to comment when asked about the layoffs and shutting down of the company’s ride-sharing and food delivery services.
Shohoz offered large discounts on its food delivery service to attract customers until October 1 as an apparent last resort but failed to attract customers.
Riders involved in the company’s ride-hailing service said they received very few calls from its app even before Shohoz shut it off in March 2020 when the pandemic began.
"I stopped using the app last year as I received almost no call from customers, and their digital wallet payment system was slow to hand over our cut of the earnings," said Sazzad Hossain, a ride-sharing diver.
Shohoz’s founding Managing Director Maliha Quadir, and Head of Marketing Grace Kanta Sarkar did not immediately respond to requests for comment.
Shohoz started its journey in 2014 as a platform to buy tickets online.
The company quickly expanded and added other tickets, including launch and movie tickets. It introduced ride-hailing service in Dhaka in March 2018. In October that year, the company launched its food delivery service in the capital city.
Amid the pandemic, it launched Shohoz Health, a digital healthcare service providing video consultation from health experts and on-demand medicine delivery on May 16 last year. The company claims to have over 100 doctors from top hospitals on the platform and over 100 pharmacies.
The startup raised $15 million funding from Singapore-based investment firm Golden Gate Ventures in September 2018. With this, the company featured on the list of most well-funded startups in Asia-Pacific.
The same year, Shohoz announced that it has secured an undisclosed amount of funding in a round led by Vostok New Ventures, a Swedish investment firm, Partech Ventures, Heritas Venture Funds, Cypress Capital, Tekton Ventures, and participated by existing backer Golden Gate Ventures.
