Potafo's comeback: challenging Swiggy and Zomato in Kerala

About this episode

In this episode, host Shan A Salam sits down with Muhammed Rashad, founder of Potafo, to explore the rise, fall, and revival of the Kozhikode-based hyperlocal delivery platform. Rashad recounts launching the startup around 2016 with just 50,000 rupees, building early dominance by partnering exclusively with iconic local restaurants, and maintaining sustainable commission rates supported by local hotel bodies. The discussion covers the operational strains that emerged when Swiggy and Zomato entered the regional market, culminating in tech bottlenecks, cash burn during an expansion to Kochi, and internal board conflicts that led Rashad to step away. Following an acquisition by Avento, Rashad returned to lead Potafo's reboot. Today, Potafo focuses on sustainable unit economics, offering local restaurant deliveries and partnering with Kerala-based D2C brands and grocery merchants to provide fast intra-city logistics.

Key takeaways

1. 1Relying on outsourced development teams without an in-house technical co-founder can severely undermine scalability during sudden demand spikes.
2. 2Forcing breaking application updates on existing customers can disrupt operations and wipe out hard-earned customer trust.
3. 3Expanding to new cities before establishing resilient cash reserves can drain startup resources and destabilise the core home market.
4. 4Sustainable, fair commission rates can earn deep loyalty and strategic alliances from local merchant associations against deep-pocketed competitors.
5. 5Internal conflicts among board members and investors can paralyse decision-making faster than external market competition.
6. 6Hyperlocal delivery fleets can pivot to support regional D2C brands with same-day warehousing and dispatch to unlock fresh revenue.

Chapters

1. 0:00Highlights
2. 1:02Introduction
3. 1:29The Story Behind the Name 'Potafo'
4. 2:42When Was Potafo Started?
5. 3:08Why Kozhikode? The Beginning of the Journey
6. 10:37After Swiggy and Zomato Entered the Market
7. 13:27Call from Collactrate
8. 16:23Technical Challenges at Potafo and How Zomato & Swiggy Exploited the Loophole
9. 18:11Expansion to Kochi
10. 19:29Facing Hard Times
11. 24:21Quitting and Re-entering the Market
12. 27:13Quick Commerce: A Fancy Concept?
13. 30:53Potafo Is Back!
14. 33:27How Potafo Will Support D2C Stores
15. 36:01Learning Points