At the heart of Southeast Asia and Singapore are our street-food and hawker culture. In 2020, the Singapore hawkers who contributed to what makes us uniquely Singapore has been added to the UNESCO Representative List of Intangible Cultural Heritage of Humanity.
Additionally, the internet economy is booming in Southeast Asia. According to the 2020 SEA e-Conomy report, 70% of the regional population is online today and is projected to exceed $300 Billion in GMV in 2025. While many industries have been hit hard by COVID-19, Online Food Delivery remained resilient with 37% of new users in 2020 representing users ordering food delivery.
In this month of Startup Conversations, we caught up with Varun and Rishabh, Co-Founders of WhyQ. Varun and Rishabh shared with us their founding story, building and managing a remote team, and the considerations of bringing on a corporate strategic investor.
Hi Varun & Rishabh! Thank you for taking the time to do this sharing! Before starting WhyQ, both of you were working in management consulting and corporate banking respectively.
What was the spark that gave both of you the confidence to quit your well-paid jobs and work on WhyQ full time?
Varun: Ever since we met each other in SMU, we have always exchanged ideas to build something on our own. We didn’t know which industry we would get into but what we both felt strongly about was our passion for entrepreneurship. As a result, we both took up more classes in entrepreneurship together and ended up working on several group projects together.
Another thing we’ve shared from childhood is that both of our families are entrepreneurs in India. So whenever we discussed our ideas about starting our own companies with our folks back home, they have always encouraged us.
We also got a few things in place – registering the company, getting a prototype in place, while we were still doing our jobs. That gave us some financial security to take the plunge and self-fund our startup for the first few months till we got funded.
In the early stages of the company, how was the decision-making process like and how do you manage conflict of ideas?
Varun: We had very open conversations and no fixed structure. Both of us were working on everything together. We usually relied on surveys from our pilot vendors and pilot end consumers (mostly our ex-colleagues) to settle any conflicts. For example, at the early stages, we had different ideas on how much we should charge for delivery, so we tested a couple of options and we finally settled on an amount that worked well with end consumers.
We were also fortunate to have 3 experienced angel investors in our first funding round. They helped us tremendously with their advice and also provided connections to other founders and strategic partners, as well as their feedback as an end consumer. Most importantly, they did not interfere with the day-to-day activities and empowered us to make the final decision. They just cheered us from the side and helped us with the tools to get to where we are getting as a company.
WhyQ has a remote team working in India. Why did the team decide to set up a remote team in India and how do you liaise and manage the team over in India?
Rishabh: We set up a team in India because of the presence of a huge talent pool at low costs in India. Our team is set up in Jaipur in India which is an up-and-coming city for developers. We have managed to grow our team from just our CTO to a team of 15 developers. Design and SEO are also managed by the India team. As a result, all the code, apps, and website is 100% owned by WhyQ. Our India team also includes our Head of Android, Head of PHP, and Head of iOS – all of whom have now worked successfully on several products and partnerships including with DBS and Foodpanda.
Our India team also hosts our customer success team including our Head of Customer Success. This is a team of highly trained 20 individuals who handle the day-to-day operations with customers.
We speak to our CTO on a daily basis and to our other heads every few days. The availability of super fast and easy-to-use tech like Zoom, WhatsApp, Slack, and Google Meet has made it very convenient to have all types of communication – from quick message exchanges to long video calls. We also do a weekly SCRUM with the entire India team to hear from all members in that team and so that they can learn about the direction of the company and weekly updates directly from the founders, which gives them a sense of belonging despite being overseas.
“We had very open conversations and no fixed structure. Both of us were working on everything together. We usually relied on surveys from our pilot vendors and pilot end consumers (mostly our ex-colleagues) to settle any conflicts.” – Varun Saraf, Co-Founder & CEO, WhyQ
What were the concerns/challenges when setting up a remote offshore team so early on? How did the team overcome these concerns/challenges?
Rishabh: The main challenges were:
a) building a pipeline of engineers/developers to hire as we expand the team
b) setting up a feedback loop so we can have regular and open discussions despite not being in the same office
We were fortunate to be able to attract developers from other companies whose technology we were impressed with. We also worked with a few recruitment agencies in the country. That helped with the first challenge.
The second challenge I’ve touched upon earlier was communication and collaboration – but with the help of tech tools like Zoom, Slack as well as concepts such as SCRUM – we were able to manage our interactions with them very well.
As Varun and I are from India, we did not face additional challenges such as language barrier or understanding the setup there, which could be significant challenges in setting up in a new country. In fact, being able to speak the local languages helped us a lot to get to bond with them better.
Delivery Hero (Parent company of Foodpanda) invested in WhyQ’s Series A round. What were some of the considerations you had when bringing on a corporate strategic investor?
Varun: Delivery Hero is one of the largest food delivery companies globally. They have a wealth of experience and connections in this space. There are both pros and cons to working with a strategic investor but we felt the benefits significantly outweighed any concerns.
Delivery Hero has brands in 13 APAC countries and that will help us tremendously in WhyQ’s overseas expansion. Delivery Hero has continued to show their faith in us by investing in the subsequent funding round following their initial Series A investment.
We feel that in order to compete with other bigger players in the industry, we needed a strong partner on our side. Additionally, we have Pedram Assadi – COO at Foodpanda – on our WhyQ board of directors. To be able to learn from him and bounce ideas off each other is invaluable to us. All in all, we could not be happier to take the plunge and add Delivery Hero as our first and only corporate, strategic investor in our Series A round in 2019.
WhyQ uses a batch-aggregation delivery model as compared to the direct delivery model in the market. What was the rationale behind having a batch-aggregation delivery model as compared to the direct delivery model?
Additionally, how are the drivers/riders more incentivized to deliver for WhyQ?
Rishabh: With hawker fare being low-cost, we had to come up with a model that does not require high minimum orders or pay high delivery fees. At the same time, we did not want to squeeze the vendors into paying us commission on every order. As a result, we came up with our unique batch aggregation model using our very own technology and algorithms which take into account several factors including distances, traffic, weight, time, weather, and so on. This has resulted in WhyQ being operationally profitable across all zones. Our courier delivers 10-12 boxes per job, making our own cost per delivery the cheapest in the industry in Singapore.
The best couriers are given more jobs and given priority in terms of when the job is sent to them. They are also given bonuses for hitting a certain milestone in terms of the number of jobs completed. We also have other bonuses on public holidays, weekends, and peak timings, when they can earn even more money. Couriers can cash out on a weekly basis so they do not have to wait too long for their earnings. Additionally, we have made the courier app very simple to use and very light so it loads fast and does not take up much data. The onboarding process is quick and fast too, and couriers can work with several other companies along with WhyQ – giving them flexibility. All of these resulted in us having 2000+ couriers today and 700 + hawker captains today.
“As a result, we came up with our unique batch aggregation model using our very own technology … This has resulted in WhyQ being operationally profitable across all zones.” – Rishabh Singhvi, Co-Founder & COO, WhyQ
With the rise of autonomous robots/vehicles, do you think it makes economic sense to have robots deliver instead of humans? How far do you think we are from driverless deliveries?
Varun: We are still years away from the commercial use of driverless deliveries. While the technology has been proven, it is more around the cost, safety, and regulatory hurdles that we expect to take more time.
Having said that, we are excited by the potential of the technology and are proud that Singapore is one of the leaders in this field. Once the product is commercially ready for use, it will definitely make economic sense to have drones and other robots do deliveries instead of humans, but as we said – we hope this is not rushed into and expect it to take years before it is mainstream.
For WhyQ, fees paid to couriers are high, despite our unique batching algorithm – because we need to compete with other delivery and transport services for the same limited pool of couriers – especially motorbikers. At scale, robots can go a long way in making that more affordable for us. However, how that impacts the thousands of gig workers who earn a living by working for companies like WhyQ remains to be seen – and that needs to be considered too.
How was the experience like to pitch and raise funds through AngelCentral as a Syndicated company?
Rishabh: The experience was very organized and transparent. As founders, we could not ask for more. Despite challenges due to COVID-19, we were able to pitch to a select group of angel investors in person and then have sessions over Zoom with a wider group. We were able to spend time answering questions and addressing concerns. Special mention to Teck Moh who had played a huge role in making this happen. We look forward to a bright future ahead with AngelCentral and we are excited for AngelCentral to continue playing a huge role in the growth of WhyQ in Singapore and beyond.
Looking forward, where do you see WhyQ in the next 5 years?
Varun: In the next 5 years, we see WhyQ operating in 5-6 countries in South East Asia – helping SMEs and MSMEs to go digital. We expect the industry to move toward a model where vendors are more open to technology and want to pay lower commissions to delivery platforms. We also expect vendors to want to own their own branding, manage their own customers, and manage their own accounts. This is where WhyQ comes in. We see WhyQ being an ecosystem to support all these needs for vendors – across industry verticals – from food to retail and also across products – from delivery integration to the raw material mart to bookkeeping.
Finally, to end the session, what are your favorite hawker dishes?
Rishabh: Sisaket Thai at Maxwell food center
Varun: Chicken Rice at Maxwell food center
About WhyQ
The new platform, WhyQ Store Manager Lite, will be a permanent solution offered by WhyQ that enables any small business owners, such as hawkers, home bakeries, cafe owners, and even non-F&B vendors, to create an online store and start delivering islandwide in 30 seconds. This app will be immediately offered to over 3,500 of WhyQ’s hawker partners. For more information about WhyQ Store Manager, please visit http://merchants.whyq.sg/
About AngelCentral
AngelCentral is the most active and fastest-growing community of angel investors in Southeast Asia. We organize regular pitch sessions, angel education workshops, and provide syndication services. Since Inception, AngelCentral has trained >300 angels and our members have invested >S$16m into the startups.
If you are a startup and would like to raise funds from our members, send in your application here!
If you are an investor and would like to find out more about Angel Investing and what AngelCentral does, we have a coffee session hosted by the AngelCentral team. These informal chat sessions are held twice monthly where we will share about what we do, our membership offers, and/or what Angel Investing is all about. Due to COVID-19, our coffee chats have moved online! Secure your slots here
