Add to cart: State of E-commerce’s overshadowed performance in 2021 YTD

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Up until last year, E-commerce was the talk of VC-town across Emerging venture Markets (MENA, Turkey & Pakistan). Apart from being a preferred sector for investments in nascent ecosystems, it was one of the only industries to be positively impacted by the COVID-19 crisis. In 2020, E-commerce accounted for the largest share in both VC deals and funding across the MENA region. In Pakistan, the industry saw startups close a third of all deals and claim a fourth of every dollar invested. It took a further 37% share of total funds invested in startups in Turkey, as Vivense closed a $130M deal.

Yet, in an unlikely twist, E-commerce failed to feature even in the top ten funded industries in Turkey in H1 2021. Furthermore, it did not stand out in the top three across the MENAPT region.

However, these numbers conceal the story of a sector that, although overshadowed by the adjacent rise of Fintech, continued to climb on an upward trajectory. Below, we scrap beneath the surface to uncover the industry’s persisted growth so far in 2021, as revealed in our H1 2021 E-commerce report.  

1. E-commerce startups continued to lead digitization efforts in Pakistan

Even as E-commerce deals across MENA and Turkey declined between 2019 and 2020, Pakistan registered a sharp rise of 150% in industry transaction during this period. By the end of July 2021, the industry in the country already equaled over 50% of deals closed in FY 2020. Meanwhile, the capital invested in E-commerce in the year so far has surpassed that raised in all of 2020 by 116%. It claimed the top spot in Pakistan in terms of both funding and deal count. Startups Tajir Pakistan and Bazaar Technologies recorded stand-out rounds. Pakistani E-commerce ventures also attracted the largest proportion of foreign investors (79%) amongst all operational industries in the country.

2. A strong come-back in MENA meant E-commerce funding in 2021 YTD surpassed that in FY 2020

Although E-commerce’s success in Pakistan comes as no surprise, it is its underappreciated performance in MENA that turned heads. In Q2 2021, funding in MENA-based E-commerce startups grew by 380% quarter-on-quarter, with a corresponding increase of eight deals. Driven by funding rounds by ventures like Sary, Eyewa and Floward, capital into E-commerce in the region in 2021 by end of July overtook that in full-year 2020 by $14M.


Interestingly and unlike any other top industry in the region, most E-commerce transactions in MENA in H1 2021, 53%, were sized under $500K. The industry continues to provide a space for fresh ventures, while startups seem to be exploring avenues for niche audiences. Egypt has come forth as the hub of E-commerce’s growth in the region. The country closed the most industry transactions across MENA in H1 2021, accounting for 15% of the capital deployed in the sector.


In another major contribution to the success of E-commerce startups, Turkish venture Trendyol achieved decacorn status in August 2021, after raising a massive $1.5B round. 

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