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Pakistan-based fresh produced B2B marketplace Tazah has successfully closed an extension round to close its Pre-SEED fundraise to $6.5M. The round was led by Fatima Gobi Ventures (FGV) and Vibe Capital, with participation from Shorooq Partners, Nuwa Capital (marking their debut investment in Pakistan), Ru-net, Alter Global, Julian.Capital (Julian Shapiro), Kinnow Capital, Early Grey Capital, and K3 Fund. The round also had participation from prolific Silicon Valley-based angel investors including Sahil Bloom, Siqi Chen, Matt Brezina, among others. Existing investors including Global Founders Capita, Zayn Capital, i2i Ventures, and notable angels also reinvested in the round.
Founded in August 2021 by two ex-Careem executives— Abrar Bajwa and Mohsin Zaka, the Pakistan-based B2B fresh produce marketplace set forth to empower millions of farmers and businesses by providing them with access to capital and a wider market. Since its inception, Tazah has scaled operations to an annualized gross merchandise value (GMV) of US$7M in a little more than four months of operations.
Throughout the year, and as most recently recorded in our November Venture Investment Dashboard, industries of digitization like FinTech, E-commerce, and Transport & Logistics have raised the lion's share of unprecedented funding in Pakistan. Observing a 325% YoY uptick in capital deployed in the E-commerce ecosystem, despite a 12% YoY drop in total number of transactions by November 2021, the Pakistani E-commerce ecosystem is set to speed up the nation-wide digital adoption. In Pakistan and other Emerging Venture Markets across the MENA for example, the dip in Early-Stage deals was in congruence with a general slump in a total number of deals closed. Yet, despite a three-year slump in Early-Stage funding rounds across MENA, Turkey, and Pakistan, early-stage startups have been raising relatively higher rounds. Average ticket sizes raised by early-stage startups (Pre-Seed & Seed rounds) have been observing a 3 consecutive year growth between 2019 and H1 2021, most interestingly from $400K to $2.3M in Pakistan.
Headquartered in Lahore, the startup has already expanded operations into Karachi with another city launch in the pipeline. Tazah aims to improve the lives of food producers, businesses, and consumers by building a tech-enabled operating system for the agriculture and food value chain. In light of this boosting investment, Abrar Bajwa, Co-Founder of Tazah highlighted “We are excited to have the confidence of some of the most active investors in Pakistan. We are also grateful for all the value-added by our existing investors and their continuous backing of Tazah. The new investments will help us accelerate our market dominance and execute some exciting projects that will help us improve our margins as we scale.”
Tazah has realized a high rate of month-on-month customer retention, with many users being return customers, exhibiting a subscription-like ordering frequency which is very rarely seen in other industries. To drive expansion into other Pakistan cities and across the region, Tazah also announced two key hires: Sultan Raja as VP Product and Umair Majeed as VP Operations. Raja has over 13 years of experience in product development and deployment globally with companies including Empiric.ai, Netsol, and Techlogic. Meanwhile, Umair has worked in leadership roles in the operations arms of leading food companies in Pakistan. Mohsin Zaka, Co-Founder of Tazah, commented “Our experience of leading large national teams and growing complex marketplaces has helped us tremendously in quickly scaling our business and building the capability to manage multi-city operations. We have also built a very strong founding team by acquiring the best talent from different industries.”
According to the Pakistan Bureau of Statistics, the agriculture sector is the largest, contributing around 24%to the country’s gross domestic product and accounting for half of the employed labor force. Given that the sector is the backbone of Pakistan’s economy, Tazah’s growing team is set on making a massive impact in Pakistan. Reflecting on this round, Ankur Nagpal, Founder of Vibe Capital shared some reasons for their backing ” It's inevitable that this business should exist -- it's a very inefficient supply chain at the moment, and Tazah streamlines it. The company is growing really fast and on track to hit 8 figures in annualized GMV in the next couple of months -- and that still represents a very small percentage of the overall market. What we are most excited about is the ability to build additional products (particularly financial products) for this market -- for instance, Tazah is in a great position to start extending lines of credit to their business buyers that they pay off after reselling the inventory.”
Being one of the most active venture investors in Pakistan, FGV is well-versed with the local E-commerce space, having backed quick commerce startup Airlift, E-commerce payments startup Safepay, and B2B marketplace Tajir, among others. With this capital and network backing, Tazah will be able to ground its position in the Pakistani market and fuel its expansion into neighboring areas. Ali Mukhtar, General Partner for FGV concluded “ At FGV, we constantly envision Pakistan’s tomorrow, today — and that is the essence of Tazah, which is revolutionizing Pakistan’s massive yet incredibly complex agricultural sector to solve inefficiencies in food and Agri supply chains. It’s incredibly ambitious, but building a digital, forward-looking Pakistan does not happen by just picking low-hanging fruits, and we can’t wait to see what’s next on Tazah’s plate.”
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