Dragoneer Investment Group and Tiger Global are backing Bazaar, a startup trying to digitize retail in Pakistan with e-commerce, fintech and last-mile supply chain solutions, they said today, joining a growing list of top investors making big bets in the South Asian market.
The two investors are leading Bazaar’s $70 million Series B funding. Existing backers including Indus Valley Capital, Defy Partners, Acrew Capital, Wavemaker Partners, B&Y Venture Partners and Zayn Capital also participated in the new round, which takes the startup’s all-time increase by one year. and a half to over $100 million.
Bazaar is trying to build what it calls a “traditional retail operating system” in Pakistan. It’s a $170 billion market that includes 5 million small, medium and businesses across the country.
But these merchants are largely unbanked and offline today. Banks and other formal financial institutions do not extend credit to these merchants because they do not have a credit score. This discrepancy has forced many of these store operators to take out loans from shark loan providers.
For those who follow the coverage of South Asia, this challenge will seem very familiar.
B2B e-commerce Udaan, logistics startup ElasticRun and Dukaan, a startup that helps stores connect, along with dozens of startups and giants including Reliance and Amazon are solving a similar problem in India.
Bazaar combines several of these offers.
The startup’s B2B e-commerce marketplace, through its network of a dozen fulfillment facilities, helps merchants in 21 cities and towns across Pakistan source items to sell.
These traders also use the startup’s Easy Khata app, which helps them keep their accounts. Bazaar’s financial arm, called Bazaar Credit, offers these merchants, many of whom operate neighborhood stores, short-term working capital financing.
Bundling many of its services makes sense for a startup like Bazaar in Pakistan because it allows the startup to offer a more comprehensive set of values to a merchant and Easy Khata helps the business win customers, Saad Jangda said. , co-founder of Bazaar. , in an interview with TechCrunch.
In August, “we had just started piloting our credit product and at the time we partnered with a third party,” he said. “Our credit product is now entirely developed in-house and is digitally connected to our last mile network. Everything from order generation to credit disbursement to collection is done entirely by Bazaar,” he said.
“We acquire customers through Easy Khata, funnel them through commerce, and once we have enough merchant data, we start building a credit product on it,” he said, adding that the startup had granted thousands of loans in recent months.
Easy Khata has over 2.4 million registered businesses across 500 cities in Pakistan. “But more importantly, Easy Khata serves as both a central system of records and also helps us get started in new cities,” he said.
Merchants have recorded more than $10 billion in annualized book transaction value on Easy Khata, the startup said. “Our expansion into Pakistan over the past few months demonstrates how critically important Easy Khata is to us,” he said.
The startup’s last mile network, which was only operational in two cities in August last year, is now adding three to four cities every month.
“The goal is to keep building for Pakistan. We want to cover more than 100 urban and rural centers across the country and build the largest network in the country so that we can move any category of goods from point A to point B when and where it is needed.
The startup plans to deploy the new capital to expand to more cities across Pakistan and launch new market categories. It also strives to expand its loan offerings and explore new product lines.
Childhood friends Saad and Hamza reconnected in Dubai a few years ago. At the time, Jawaid was at McKinsey & Company while Jangda worked with Careem as product manager for transportation and food delivery products. The opportunities they saw in their home country prompted them to return to the country to build Bazaar.
“We are excited to support Bazaar’s vision of creating an end-to-end commerce and fintech platform for millions of unbanked and offline merchants in Pakistan,” said Christian Jensen, Partner at Dragoneer Investment. Group. “Bazaar’s pace of geographic expansion and new product development is testament to the rare talent and culture that Hamza and Saad have cultivated at Bazaar.”