KARACHI: Bazaar, an eight-month old business-to-business e-commerce marketplace that aims to digitise traditional retail in Pakistan, has raised $6.5 million in seed funding, bringing the total raised by the startup to $7.8 million in two funding rounds.
The announcement from the startup comes a few months after an earlier denial by the company that they were raising new investment in seed funding after Profit published a news report in August last year that Bazaar was seeking as much as $15 million in seed funding from investors.
A senior official from Bazaar’s management team had reached out to Profit after the publication of the aforementioned news report, flatly denying that Bazaar was in the active process of raising its now disclosed seed round. Profit had then learnt from sources that the startup had planned to keep the round undisclosed for a few months even if the round was successful.
Bazaar’s $6.5 million seed round was co-led by Germany-based Global Founders Capital, and US-based Indus Valley Capital, which had led the startup’s previously pre-seed round. Other investors in the round included several renowned global investors such as S7V, Wavemaker Partners, Derayah Venture Capital, and Next Billion Ventures, all of whom are making their first investments in Pakistan, according to a statement by Bazaar.
Existing investor Alter Global also participated in the seed round.
According to the startup, the recent round is one of the largest seed rounds raised by a startup in the Middle-East, North Africa and Pakistan (MENAP) region. Bazaar had earlier raised $1.3 million in pre-seed funding in June last year.
Moreover, angel investors, including current and former leaders of Careem, a partner at DST Global, and founders of other prominent B2B startups including Maxab (Egypt), Ula (Indonesia) and Sokowatch (Africa) have also joined Bazaar’s board.
According to the startup, their mission is to digitise traditional retail in Pakistan. Using the country’s rising mobile adoption, Bazaar aims to empower the millions of SMEs that dominate the market by providing significant value and convenience through various digital products.
“We are excited to back an extraordinary team in their journey to help millions of small shops in Pakistan digitise their retail business,” said Tito Costa, partner at Global Founders Capital.
As their first product, Bazaar has created a mobile-based B2B e-commerce marketplace that enables mom-and-pop grocery stores (called kiryana stores) to purchase directly from manufacturers, wholesalers and suppliers. The Bazaar App provides kiryana owners a large assortment of branded and unbranded products, which can be ordered at any time, any day with free next-day delivery.
On one end of the marketplace, kiryana owners can benefit from Bazaar App’s convenient ordering, reliable delivery and competitive prices. Suppliers, on the other end, through Bazaar get a direct-to-retail channel and are provided actionable insights on purchase patterns and trends.
“When we invested in Bazaar in May, they set ambitious targets for 2020. They went on to crush those goals by 10x. Indus Valley Capital is thrilled to double down on Bazaar and strengthen our partnership to revolutionize the $150B retail industry in Pakistan,” said Aatif Awan, Managing Partner at Indus Valley Capital.
Bazaar was co-founded by Saad Jangda and Hamza Jawaid, whose personal mission is to bring together and cultivate talent both in Pakistan and the diaspora to ultimately create a platform that further enables entrepreneurship in the country. Prior to Bazaar, Jangda was a product manager for ride-hailing and food delivery products at Careem, while Jawaid was a management consultant at McKinsey & Company, based in Dubai.
“As the fifth largest country in the world with rising digital adoption, we have an incredible opportunity to empower micro businesses through technology. Over 80% of our customers own and operate smartphones, yet their way of running business has not changed, til now. By bringing them online, we can meaningfully improve their business and their lives, freeing up time to focus on the most important tasks, eventually enabling greater returns,” said Jawaid.
Within just eight months of launch, Bazaar claims to have served over 10,000 retailers in Karachi and has a catalogue of over 500 SKUs on its platform. In this short time, the company says they have managed to assemble a team of skilful individuals from some of the top local and global companies such as Careem, Swvl, Kitopi, Daraz, and Unilever.
“At Bazaar, we believe that building the technology layer for traditional commerce is a massive opportunity. With the sheer size of the Pakistani market, a new narrative and spotlight on our ecosystem and an abundance of Pakistanis moving back home, we finally have all the right fundamentals to build massive tech institutions. We have been blown away by our early team and humbled by the roster of investors who are supporting us on this journey. It is further validation of the sheer yet untapped potential of tech in our country,” said Jangda.
With this fresh round of funding, Bazaar plans to expand its footprint across Pakistan, build its product capabilities, and deepen its relationship with customers by offering more value-added services.