In one of the region’s largest seed rounds, Bazaar, a Pakistan-based B2B e-commerce company launched just eight months ago to digitize conventional retail in Pakistan, has raised $6.5 million. Berlin-based Global Founders Capital, which is making its first investment in Pakistan, and Pakistan-focused VC Indus Valley Capital, which also led the pre-seed round of the company in June of last year, co-led the round. It is the second largest seed round ever created by a startup in the Middle East, North Africa, and the largest in Pakistan. This brings Bazaar’s overall increase to $7.8 million to date, making it one of the nation’s best-funded startups.
Bazaar has also brought together a diverse mix of leading regional and global institutional and angel investors in addition to the lead investors. The round was attended by early-stage VC S7V, Singapore-based Wavemaker Partners, Saudi Derayah Venture Capital, and US-based Next Billion Ventures. Present and former leaders of Careem, a member of DST Global (one of the leading late-stage tech investors), and founders of other B2B startups including Cairo-based Maxab, Ula in Indonesia, and Africa’s Sokowatch, are the angels that entered the cap table.
Created by Saad Jangda and Hamza Jawaid, the mobile-based e-commerce marketplace of Bazaar allows people operating neighborhood mom-and-pop grocery stores (locally known as kiryana stores) to buy from producers, wholesalers, and suppliers the inventory for their stores. Over 500 SKUs of branded and unbranded items are included in the app, providing free delivery for the next day.
Kiryana owners benefit from easy ordering, reliable delivery and affordable rates at one end of the marketplace from the Bazaar app. Suppliers, on the other hand, get a direct-to-retail channel via Bazaar and are given actionable insights on purchasing patterns and trends,” the startup said in a statement explaining its value proposition.
“We are delighted to support an extraordinary team in their journey to help millions of small shops in Pakistan digitize their retail business,” said Tito Costa, partner at Global Founders Capital.
When the two co-founders began building Bazaar, by the end of 2020 they had set a goal of serving 800 retailers in Karachi, but they closed the year with more than 10,000 retailers, exceeding their initial goals by more than 10x, both in terms of the number of users served across the platform and GMV.
“Aatif Awan, Managing Partner at Indus Valley Capital, said, “They set ambitious goals for 2020 when we invested in Bazaar in May. They went on to crush 10x of those goals. Indus Valley Capital is pleased to double down on Bazaar and enhance our collaboration to revolutionize Pakistan’s $150B retail industry.
Saad and Hamza attributed the early success of the platform to two things: their team of talented people who previously worked with companies such as Careem, Swvl, Kitopi, Daraz, and Unilever, and the reatilers’ much better than expected response, “When we started, we were told that the owners of grocery stores in Pakistan would be unwilling to use technology to procure I
Hamza explained this further in a statement, “We have an incredible opportunity to empower micro-businesses through technology as the fifth largest country in the world with increasing digital adoption.” More than 80% of our customers own and operate smartphones, but until now, their way of operating business has not changed. We will greatly boost their company and their lives by taking them online, freeing up time to work on the most critical things, ultimately allowing greater returns.
The co-founders were both formerly based in Dubai. At Careem, Saad was a product manager and Hamza worked at McKinsey as a management consultant. In addition to enabling entrepreneurship and transforming Pakistan’s retail sector as a corporation, the two also have a personal mission to turn Bazaar into a company that brings Pakistani talent together and cultivates them.
“At Bazaar, we believe that building the technology layer for traditional commerce is a huge opportunity,” Saad said, commenting on the occasion. We finally have all the right fundamentals to create major technology institutions with the sheer size of the Pakistani market, a new narrative and spotlight on our ecosystem and an abundance of Pakistanis coming back home. Our early team has blown us away and we have been humbled by the roster of investors who are joining us on this journey. It is further proof of our country’s sheer but untapped potential for technology.
Lahore-based Tajir was only one VC-backed B2B ecommerce marketplace in Pakistan that was part of the Winter 2020 batch of Y Combinator when Bazaar announced its $1.3 million pre-seed round in June last year, but the landscape has changed completely in the last six months with players such as Retailo and Dastgyr raising VC capital. Retailo, which is headquartered in Riyadh but also operates its Karachi marketplace, raised $2.3 million in one of the region’s biggest pre-seed rounds last October. So it’s fair to say that in no time has B2B e-commerce in Pakistan become a very crowded market.
Commenting on the market, Bazaar co-founder Hamza Jawaid said in a recent appearance at an online event that Pakistan’s retail sector is broad enough for multiple players to co-exist. The first product is a marketplace. The co-founders of the Karachi-based start-up indicated that there are several other products in the pipeline that will empower millions of SMEs in Pakistan, a step that could help it become the leading space company. To do so, it plans to use a portion of the fresh funds. The cash will also be used to help Bazaar grow its team and expand Pakistan’s footprint.
With start-ups like Bykea, Airlift, and many others raising tens of millions of dollars from some of the world’s biggest investors, the last eighteen months have proved to be a turning point for Pakistan’s technology ecosystem. The record seed round of Bazaar indicates that this growth will begin in 2021, as well as continuing to bet on the local startups here with new foreign tech investors.