Padash: 15mn delivery in Iraqi Kurdistan
Quick commerce, without the dark store OPEX.
Biography
Ahmed Jamal is the co-founder of Padash, a startup facilitating ultra-fast bread and grocery delivery in Iraqi Kurdistan. Currently, Padash serves six neighborhoods, employs 30 drivers and delivered 12,000 orders just last month.
Prior to Padash, Ahmed held a business and product development role at an Iraqi pharmaceutical company for over four years.
Padash is an iteration from previous products, all started with the same co-founders. Can you go through the main pivots?
Our first product was a trivia app for Kurdistan, which we named Kurdavia. It was modeled after HQ Trivia, an American app that had gone viral. The concept was simple: users had to login at the same time every day and answer trivia questions. Winners got monetary prizes. The app had high-virality potential, since users anticipated the game every evening (we ran ours at 9pm), and could play with family at the dinner table, for example.
The app took off. We reached over 500,000 downloads in the first six months, settling in at 100,000 daily active users (DAU). At our peak, we reached 1.5M downloads and 800,000 MAU.
We encountered a double-edged sword on the marketing front. The digital ads market in Kurdistan was still nascent, so there wasn’t a lot of competition. As a result, cost per mille (CPM) was extremely low. We could thus reach a lot of eyeballs without spending a lot of money. That was great for our own acquisition, less so for our business model. We made money by selling ads on the app which, following this logic, advertisers weren’t paying much for.
Running the app was an operational grind as well. Churn was high, people got bored. We realized that a gaming studio’s business model depends on constantly shipping new, engaging games. That didn’t excite us.
RO insights: Iraq, two markets in one
Iraq has the particularity of housing a semi-autonomous Kurdish region, replete with its own state apparatus. For Iraqi founders, expanding outside or to Iraqi Kurdistan is almost akin to expanding to a new country.
Here’s how Zahi Hilal, former investment manager at Iraqi Venture Partners, explains:
“The Iraqi market isn’t significantly fragmented. However, challenges to scale operations across the country can be attributed to 2 factors: limited funding and frictions between central Iraq and the semi-autonomous Kurdish region.
The semi-autonomous Kurdish region has its own government, court system, and law enforcement entities. This requires founders to treat expansion there as an expansion to a new market. With that being said, the main challenge to expansion remains the limited capital available to Iraqi startups.
The shortage of growth capital, necessary to fuel expansion, nudges founders to consolidate their market presence in the major city they start from. Baghdad, as the capital and home to a population of 10 million, thus stands as the hub for startup activity.
Following closely, Erbil, the Kurdish region’s capital, assumes a secondary role. The shortage of Series A capital pushes founders to sacrifice growth for profitability while they opportunistically initiate expansion campaigns. This might create the perception of a fragmented market.”
Excerpt from How an Iraqi VC thinks in 2023, originally published in The Realistic Optimis
You then start building digital tools for local restaurants. How did that come about?
We enabled local restaurants to pay to display discount coupons on the app, with the hope of attracting users to dine with them. The conversion rate was abysmal though, so restaurants stopped paying us.
While that particular product didn’t work, it opened our eyes to the restaurant, bakery and grocery shop segment. We explored what other pains they had, and which ones we could solve through tech. We found that those restaurants direly lacked customer data. They didn’t know which dishes led customers to come back (and which dishes led customers to never come back).
We built a “QR code menu”, where customers could order from their phone, via the QR code. We captured the device ID, creating a trail of that customer’s interaction with the restaurant, what they ordered, how frequently they came back… That device ID also enabled the restaurant to retarget customers on social media.
The product was good and useful, but we were early. Restaurant owners didn’t understand it well enough to become enthusiastic users. At that point, we’re two years into this startup, two failed products and my co-founders’ savings are drying up. So are mine.
We get to the inklings of Padash, a last-chance attempt at making this work. How did that idea form?