Retail digitiser SnappRetail has raised $2.5 million in pre-seed funding for its microenterprise system for retailers to help them compete with modern hypermarkets like Alfatah and Imtiaz.
The round was led by Zayn Capital’s BitRate Fund with participation by Antler and Century Oak Capital. Profit has seen startup’s internal documents to confirm the amount of the raise.
SnappRetail provides micro and traditional retailers in Pakistan with a suite of digital solutions to help them remain relevant and competitive. The startup was co-founded in 2021 by Unilever alumni Adeel Rasheed and Moazzam Ali Khan, Ahsan Aziz who has worked at TRG, and Moiz Ali who is a former Primatics Financials employee, SnappRetail offers retailers point of sale (POS) tools and a digital operating platform.
Besides having direct work experience in the retail industry through one of the biggest FMCG companies, the team at Snapp has previously cofounded Resouces Linked which provided recruitment services and claims to have placed employees at 100,000 retailers.
At Snapp now, the team has built a microenterprise system which helps shop owners manage end-to-end operations that help traditional retailers grow their margin and revenue, remove inefficiencies in their operations and improve cash flows.
The systems are understood to be sophisticated enough that while all the kiryana stores in Pakistan can potentially use them, not all of them would be able to do so because of digital literacy barriers and their own scale. SnappRetail is hence targetting the top 200,000 to 300,000 mom-and-pop stores that are big enough to be needing such systems.
“Our target retailer is the one which has daily sales ranging from Rs1 million to Rs3 million and stores 10,000 to 20,000 products at the store location,” says Adeel Rasheed, CEO at SnappRetail. “Such retailers face competition from modern supermarkets and to be able to compete, the first thing they need to do is to switch from manual operations to digital operations.”
The digital systems help retailers make prudent and quick business decisions such as timely and adequate inventory replenishment, which eventually helps such retailers improve revenue and margins, eventually helping them grow. The startup is further integrating with fintech companies to provide retailers with extra revenue streams such as mobile top-ups.
In the long run, SnappRetail will provide these retailers access to micro-credit through partner banks and fintech companies for working capital, equipping them with systems to accept digital payments, and helping them make inventory procurement easier by partnering with distributors and B2B eCommerce startups.
SnappRetail is currently offering its system without any upfront payment and is currently charging a monthly rental fee of Rs1,500, which they plan to increase once the retailers see their revenues amplified because of SnappRetail.
“The fundamental revenue verticals would be three, however. One would be when we lend to retailers through our partners, secondly on digital payments, and lastly through orders generated with distributors,” says Adeel.
The startup has currently deployed its system at about 100 retailers and plans to increase the number to 1,000 across Pakistan in the next few months.
“We believe that the whole retail and startup ecosystem is working towards improving the livelihoods of the traditional retailer, grocery and beyond. We are trying to create an ecosystem where all aggregators and other applications can come in and take advantage of our base platform. With our pilot we have seen that retention is very high and gross transaction value through the system is extremely high vs any other play,” Moazzam Ali Khan, co-founder at SnappRetail said in a statement.
Commenting on the investment, Faisal Aftab, general partner and co-founder at Zayn BitRate Fund commented: “Being a proven concept globally, there is no doubt SnappRetail has the right approach to solving the essential problem of the retailer.”
“We were particularly impressed by the experience and maturity this founding team brings to the table, hitting the right balance between hypergrowth and managing the burn. This balance is the need of the hour as SnappRetail gears up for national and eventually international success.”