Lessons from Nepal’s First Generation of Disruptors

In the past decade, Nepal has seen a start-up boom. Coffee shops in Kathmandu buzz with young founders sipping latte with potential investors and local media feature startups with enthusiasm. It almost feels like Nepal is incubating its own Silicon Valley.  

But I have watched with sadness as promising Nepali ventures capture headlines and funding rounds, only to fade away under the weight of their own hype. Startups are hard. They say 9 out of 10 startups fail. As many of Nepal’s most celebrated ventures plateau or disappear, their journeys offer rich lessons for founders, investors and other stakeholders. In this piece, I have tried to chronicle five of the country’s most visible startups. Each told a compelling story but not all of them delivered on it. Disclaimer: the cases have been randomly picked and compiled based on public perception and may not capture inside stories. 

A Ride That Faded Away 

Tootle was Nepal’s first ride-sharing platform that tapped into a real urban transportation problem. It built significant user traction in its early days, contributed to establishment of dignity of labour amongst riders and even nudged policymakers to start working on regulations governing new economy businesses. It was popular and truly a dream startup. 

But instead of consolidating the operational backbone, the leadership was swept into a wave of media attention. Public speaking gigs, features in business magazines and startup awards became the primary outputs. Meanwhile, a formidable competition from deeper-pocketed entrant like Pathao emerged and soon dominated.  

Tootle itself got disrupted. And it self-sabotaged by underestimating the importance of execution and overestimating the power of public goodwill. I understand the business is now trying to revive under a new management and I wish them success. 

Dream of Nepali Amazon  

Sasto Deal symbolised e-commerce optimism in Nepal. The opportunity looked enormous in an underserved online retail market. The charismatic and persuasive founder pulled in funding and media buzz in equal measure. 

But as the brand scaled, operational cracks widened. Inventory mismanagement, fulfillment failures and cash flow mismatches haunted the company. Customers grew increasingly frustrated and investors saw their value diminish with down-rounds that were raised. The final blow came when concerns of unpaid vendors and disillusioned employees became public. The house of cards collapsed, leaving behind a story that still haunts Nepal’s alternative investment fraternity. 

Home Chefs in Business  

Where food delivery companies generally partner with restaurants, Foodmario tried something bolder: empowering home cooks, mostly women, to become food entrepreneurs. It was a platform with a social angle, that was described as exemplary even by Nepal’s only billionaire. 

But the model was fragile. Quality of food varied, logistics were messy, and customers weren’t always willing to pay a premium for home-cooked meals. Managing chefs as well as costumers proved too difficult. Despite noble intentions and bursts of momentum, Foodmario never gained any scale of significance. I am not sure if it is operational anymore. 

Momo Mania 

Although not a tech startup, Dalle as a food chain was no less disruptive. It brought cultural flair and urban branding to Nepal’s beloved momo. Dalle captured the imagination of the nation as its flagship product achieved instant popularity, securing one of the earliest venture capital investments in Nepal. 

Unsurprisingly, rapid expansion of number of outlets followed and it looked like Dalle was Nepal’s response to Chipotle. That’s perhaps when the challenges began to creep in, which founders took notice of only much later. Operational costs became too high for a momo business. Other momo entrepreneurs learnt from Dalle and expanded their own enterprises, retaining higher margins they enjoyed historically.  

Dalle remains operational but without the spark that once defined it. The founders are capable and grounded entrepreneurs and I believe they have the drive and inclination to revive the business to its old glory.  

Food in the Du  

One startup that has demonstrated staying power is Foodmandu, Nepal’s pioneering food delivery platform. It launched in 2010, long before delivery culture went mainstream. It has survived political instability, an earthquake, local competitors and even a pandemic. 

So, what did Foodmandu get right? 

It scaled cautiously. It invested in logistics and back-end operations before marketing blitzes. It built enduring relationships with restaurants and riders. Although there were growing pains and hiccups in peak periods, the brand cultivated enough trust to stay the course. While startups like Sasto Deal and Tootle raced ahead on branding and promises, Foodmandu moved quietly and deliberately, attracting rounds of funding and enabling the founder to achieve a handsome partial exit. 

Foodmandu is seemingly a rare success story in this list but it continues to face competitive headwinds and cash burns. With prominent Private Equity investors on its cap table and a war chest of cash, will the company really make it big? Let’s watch. 

What These Stories Tell Us 

These examples reveal a pattern and crucial lessons for Nepal’s new wave of startups. 

Storytelling outpaced structure: Founders mastered pitches but not system building. Charisma may secure funding but it won’t fix supply chains. Even popular brands need back-end muscle and strategic evolution. 

Capital came before governance: Many startups raised money but lacked governance. Boards lacked proactivity and oversight. Investors became cheer-leaders instead of partners and backed the buzz instead of builders. Without accountability, growth became chaotic. 

Execution is more important than idea: Every venture had a viable idea but execution failed in terms of consistency, team management and openness to pivot. 

Expect competition from unexpected corners: Being first isn’t enough. Doing better than competition is more important. In Nepal, staying power is true disruption. 

Nepal is a tough market: Low purchasing power, poor infrastructure and regulatory uncertainty make scaling hard. Startups need more than grit here. It takes a village to raise a child. In fragile ecosystems like Nepal, where capital is scarce and institutional trust low, each failed hype story sets the entire scene back.  

Let’s Not Forget the Failures 

Despite failures, Nepal’s startup landscape isn’t bleak. Entrepreneurs have learned from the crash landings. Founders today are savvier and are hopefully focusing on building businesses rather than going viral. A few success stories from the earlier generation like eSewa and Himalayan Java are cases to draw inspiration from. 

Startups fail everywhere, so let’s not bury these stories as embarrassments. They’re valuable case studies for business schools, debates in boardrooms and inspiration for building the future. Let’s celebrate startups for surviving the process of becoming real businesses, not just for raising funds.