Dastgyr, a B2B e-commerce marketplace based in Pakistan, has raised $37 million in its Series A funding round led by Veon Ventures, per an announcement.
This marks the largest Series A round in Pakistan.
The round also saw the participation of a series of investors – both institutional and individual. These include names such as Zinal Growth Fund, DEG, Khwarizmi Ventures, Oman Technology Fund, Cedar Mundi Ventures, Reflect Ventures, Century Oak Capital, Haitou Global, Going VC, Astir Ventures, K3 Ventures, Chandaria Capital, SOSV, Edgebrook Partners, and EquiTie.
According to filings with Singapore’s Accounting and Corporate Regulatory Authority (ACRA) accessed by DealStreetAsia – DATA VANTAGE, Dastgyr has raised $15 million from Veon Pakistan Fintech Holdings.
VEON, headquartered in the Netherlands, has been looking to invest in the company since December last year. However, the closing got delayed due to the ongoing Russia-Ukraine crisis that has slowed down deal-making globally.
Of the total corpus that the startup has raised in the current round, as much as $25.3 million has been pumped in now (including the $15 million funding from Veon) as equity, while the remaining $11.7 $million has been raised through convertibles through tranches earlier.
“We welcome the new investors to the Dastgyr family as we continue to work relentlessly toward our vision of building an Alibaba for emerging markets worldwide,” Dastgyr co-founder Zohaib Ali said in a statement.
Dastgyr plans to use the corpus to improve its tech stack and strengthen its seller app, which provides credit to sellers, giving them additional working capital for growth.
Besides looking to expand into 15 new cities in Pakistan, Dastgyr is also understood to be wanting to ramp up its global presence and tap emerging markets across Southeast Asia, the Middle East, and North Africa.
The startup claims to have grown 300% since its last funding and added 42,000 retailers across five cities since its inception in 2020 during the peak of the pandemic. It has expanded into new categories such as construction and building materials.
Given that Veon operates in Pakistan through Jazz, a telecom operator and JazzCash, a fintech firm; there are chances of collaboration.
In a statement, Aamir Ibrahim, CEO at Jazz, said: “This investment highlights VEON’s commitment to scale up Pakistan’s digital economy and provides Dastgyr with a platform to build synergies with Jazz’s subscriber base of 75 million and with JazzCash, further integrating the startup into Pakistan’s fintech ecosystem.”
With the current round, Dastgyr’s total funding has stands at over $40 million to date.
The startup last raised a seed round of $3.5 million led by SOSV in July.
Dastgyr also counts ADB Ventures, Seedstars, Haitou Global, GoingVC Partners, Kube VC, and MOX.
Among other startups that have raised funding in Pakistan, Retailo has garnered $36 million, while Bazaar has amassed $30 million. Jugnu and Tajir have raised $22.5 million and $17 million, respectively. All these startups operate in the B2B e-commerce segment.
Bazaar, being the biggest in the space in terms of operational cities, has raised a total of $107.8 million in funding in four rounds. In the most recent round announced last month, it secured $70 million in its Series B round.
In March, Sary, a B2B marketplace with a presence across MENAP, made a strategic investment in Jugnu with a capital infusion of $22.5 million in a Series A round.
DealStreetAsia has seen an earlier version of Dastgyr’s pitch deck. The startup claims to be more capital efficient than its counterparts, churning out a gross merchandise value (GMV) of $36 for every dollar invested, compared to competitors earning $11 of GMV for the same. This can be explained by the fact that Dastgyr does not hold any inventory.
Founded by Muhammad Owais Qureshi and Zohaib Ali, Dastgyr aims to connect over two million underserved retailers in Pakistan and millions more in similar emerging markets directly to manufacturers, distributors, and wholesalers to fix what is currently a fragmented supply chain. It operates in Karachi, Lahore, and Gujranwala for now and is also planning to expand nationally.
There are around 2 million Kirana store owners in Pakistan that make up approximately 92% of all retail. This makes this space a $152 billion market in Pakistan.
Dastgyr has declined to comment on the story.