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Pakistan’s B2B marketplace Dastgyr has raised $37M in a Series A round led by VEON Ventures. The round also saw investment from Zinal Growth, DEG, Khwarizmi Ventures, OTF Jasoor Ventures, Cedar Mundi, Reflect Ventures, Century Oak Capital, Hi2 Global, GoingVC, Astir Ventures, K3 Diversity Ventures, and Chandaria Capital, along with angel investors. Existing investors SOSV, Edgebrook Partners, and EquiTie have also reinvested in the Series A round. This marks the first venture investment in Pakistan for a number of investors including the lead investor VEON, through its Corporate Venture arm VEON Ventures.
Launched in September 2020, Dastgyr aims to connect over 2 million underserved retailers in Pakistan and millions more in similar emerging markets directly with manufacturers, distributors, and wholesalers to fix what is currently a fragmented supply chain. Its B2B demand-led marketplace enables businesses to order wholesale inventory from a range of stock-keeping units (SKUs) with next-day delivery. Dastgyr’s Seller App enables sellers to upload their own products, determine pricing, and create purchase orders, while the Customer App enables buyers to purchase goods at the lowest prices owing to competition on the seller's side. Product categories on the app include fast-moving consumer goods, electronics, pharmaceuticals, industrial goods and raw materials, and construction and building materials.
As recorded in our E-commerce Q1 2022 Venture Investment Report, Pakistan's E-commerce sector peaked in Q1’22 raising the lion’s share of investment driven by Bazaar Technologies’ $70M Series B round to account for almost 50% of all capital raised in the first quarter of the year. Across EVM’s, the sector recorded a QoQ growth of over 300% in capital invested with the MENA region closing the lion’s share of E-commerce deals, accounting for almost 60% of total transactions across MEAPT. The sector saw a number of deals closed in B2B commerce, social commerce, and on-demand venturing startups including Riyadh-based Q-commerce startup Nana, and Egypt’s social commerce platform Brimore. In Pakistan, remarkable funding rounds have been closed by reselling platforms for wholesale products and B2B raw materials marketplace with sizable investments in Markaz Technologies and Zaraye. Pakistan has observed a trend of emerging E-commerce ventures pushing to digitize and support the SME segment, a trend also observed in the rise of FinTech solutions offering digitization to the unbanked and underbanked with startups like Taro Technologies raising funds to bring BNPL services to merchants and shoppers.
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Dastgyr’s asset-light model functions based on a cross-docking approach: goods are delivered to sorting centers, sorted into individual orders and routes, and are then dispatched to customers. Dastgyr also provides shariah-compliant lending services for both sellers and buyers through banking and fintech partners, enabling its user base, which is largely unbanked and lacks access to external capital. SMB retailers are the backbone of Pakistan’s economy, representing a combined market of roughly $150Bn, about 30%–40% of the country’s GDP. Zohaib Ali, co-founder of Dastgyr shared his thoughts, “We’re thrilled to achieve this milestone in the current global economic environment. While we are proud of our growth, we are even prouder of achieving this growth with high capital efficiency. In today’s world, the focus is shifting toward unit economics, burn multiples, and sustainability, but these have been our core focus areas from day one. We welcome the new investors to the Dastgyr family as we continue to work relentlessly toward our vision of building an AliBaba for emerging markets worldwide. We’re lucky to have found strategic partners who believe in our mission and have displayed unwavering faith in our team.”
VEON, the parent company of the telecom (Jazz) and fintech (JazzCash) companies in the country, joins Dastgyr at a time when the startup aims to expand its Buy Now Pay Later (“BNPL”) offering and introduce lending products for its sellers as well. Jazz and JazzCash will enable the startup to scale its lending arm across the country. “As part of VEON's transformation into a digital operator that delivers a growing range of services to our customers we are investing in leading digital companies like Dastgyr in the countries where we operate. These investments are the building blocks of the digital ecosystem that will enable us to deliver on our strategy,” said Mohd Khairil Abdullah, CEO of VEON Ventures. “Pakistan, with its rapidly growing digital sector, is a key market for VEON. By bringing together Dastgyr’s e-commerce business with Jazz's communications network and JazzCash's mobile payments platform, we will catalyze the growth in digital services in Pakistan. This will be further enhanced by the digital banking services that we have ambitions to provide.”
Dastgyr aims to launch 15 new markets in Pakistan, along with its first international market, in 2022. The B2B marketplace will also introduce new lending products for its rapidly growing seller base. With this round of capital financing, Dastgyr aims to continue investing the fresh capital in growth, technology, and people. The startup will also utilize distribution networks and digital payment solutions from VEON’s existing Pakistani operating companies Jazz and JazzCash. “Pakistan’s start-up ecosystem is at a critical juncture and only startups focused on addressing key challenges and adopting localized solutions will survive and thrive,” concluded Aamir Ibrahim, CEO of Jazz. “This investment highlights VEON’s commitment to scaling up Pakistan’s digital economy and provides Dastgyr with a platform to build synergies with Jazz’s subscriber base of 75M and with JazzCash, further integrating the startup into Pakistan’s fintech ecosystem."
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