Dastgyr, a Karachi-based B2B ecommerce marketplace, announced today that it has raised $3.5 million in a seed round led by SOSV. The round, which brings the company’s total funding to $4 million, also included participation from ADB Ventures, Seedstars, Edgebrook Partners, Bahrain’s Zayani Venture Capital, Dubai’s Tricap Investments, and several angel investors, including Twiga Foods founder Grant Brooke and Tokopedia’s VP of Marketplace Albertus Aldo. For the majority of these investors, this is their first investment in Pakistan.
Dastgyr, founded in 2020 by a group of former Careem and Airlift employees, uses its mobile app to enable mom-and-pop retailers, locally known as kiryanas, to procure inventory for their stores – ranging from fast-moving consumer goods to mobile accessories and stationery. It currently offers over 2,000 SKUs from various suppliers on its marketplace, with next-day delivery available in Karachi and Lahore, the two cities in which it operates. Since its official launch in September 2020, the startup claims to have served 30,000 retailers.
It operates in a highly competitive space that has become increasingly competitive over the last two years. At least ten Pakistani startups are attempting to address inefficiencies in the grocery retail supply chain, and five of them, including Dastgyr, have raised $3 million or more this year alone. What differentiates it from some of the other players is its asset-light strategy. Dastgyr neither owns nor maintains inventory. After receiving orders from customers, its suppliers ship the products to its sorting centres, where they are sorted and then dispatched to retailers.
Muhammad Owais Qureshi and Zohaib Ali, co-founders of Dastgyr, previously worked together at Airlift. Owais stated in a statement, “Zohaib [my co-founder] and I have previously worked extensively in the field of human movement. While we have studied and addressed many of the issues associated with transit logistics, the movement of goods is a much larger issue for the economy as a whole. When the pandemic struck, this problem became exponentially worse, and no one was hit harder than small businesses. Dastgyr was founded to assist small businesses such as Abdul’s in Lahore and Saeed’s in Karachi, two of our very first customers.”
Additionally, the ecommerce startup is preparing to launch various types of digital lending solutions for merchants. It has been testing a buy now pay later option for retailers, allowing them to defer payment on purchased inventory. “We’ve been running a pilot for the BNPL feature with our most devoted customers for some time now, and we’ve seen excellent traction. Customers who have received a BNPL facility have increased their average basket size, confirming our hypothesis and paving the way for scaling the experiment,” Haseeb Siddiqui, Dastgyr’s Founding Member and Head of Product, told MENAbytes.
Along with BNPL, Dastgyr intends to launch microloans to assist retailers in expanding their businesses through the addition of new categories, increased store capacity, or the purchase of equipment such as refrigerators and shelves. Dastgyr will not fund any of the loans through its own resources. Rather than that, it will collaborate with multiple partners on all credit solutions, the startup stated without providing additional details.
Along with launching its fintech offerings, Dastgyr intends to use the funding to advance its technology and scale its operations.
According to William Bao Bean, General Manager at SOSV, “Pakistan is following the same pattern as India and China did five and ten years ago: with 75% of the population owning a smartphone, the first movers in mobile-first services will win.” We are particularly impressed by Dastgyr’s growth culture: the company’s fintech offering is truly transformative for the unbanked and underbanked, ensuring their businesses’ success. We are particularly impressed with the company’s growth culture and are proud to include it in our portfolio.”