Year 2021 has proved to be a blessing for Pakistan’s startup ecosystem as a historic investment has entered the sector in just eight months.
On Tuesday, Bazaar, a business-to-business (B2B) marketplace and digital ledger, raised $30 million in the country’s largest Series A round. The funding was led by Silicon Valley-based early-stage venture capital firm Defy Partners and Singapore-based Wavemaker Partners.
With a total funding of $38 million, the company is now among the best funded startups in the country.
The firm operates in Karachi and Lahore and its digital ledger, called ‘Easy Khata’, is available all across the country.
“E-commerce has rapidly taken over and accelerated the technological landscape of Pakistan, hence it is no surprise that the growth of this app has been phenomenal,” said SI Global CEO Noman Ahmed Said in comments to The Express Tribune.
“The demand for e-commerce merchant services continues to skyrocket in Pakistan.”
Said forecast an increase in general support for e-commerce startups in the country, citing that they seamlessly blended into the lives of people amid the new normal being witnessed in the wake of the pandemic.
“Local companies should not only take inspiration, but also hone the talent and nurture the upcoming entrepreneurs in a bid to enable them to pave the way for creativity and success,” he said.
With startups springing up in huge numbers in Pakistan, he hoped that they would contribute to the economic dynamism by spurring innovation and injecting competition into the market.
“Many times, the most successful startups emerge in countries with the highest needs because companies are able to flourish by tapping those requirements,” he said.
He added that fresh funding for Bazaar would help inspire startups and steer advancement of technology in Pakistan.
Ignite CEO Asim Shahryar Husain termed 2021 a remarkable year for Pakistani startups as far as investment was concerned.
While Pakistani startups received $77 million in funding in 2020, they got investment of over $228 million in 2021 to date, revealed data collected by Ignite.
The funding had grown almost threefold over 2020 with four months still left before the end of the year, he said.
“If this momentum continues for the next couple of years, annual investments in Pakistani startups can reach billions of dollars by 2025,” he said.
The application is tapping the $170 billion fragmented retail industry that is predominantly offline in Pakistan and lacks access to formal financial services.
While Pakistan has the third largest unbanked population in the world, the country is currently undergoing a massive shift with digital penetration growing exponentially due to availability of cheap smartphones and mobile broadband services.
The Ignite CEO cherished that in the past five years, the government, academia and industry had launched several incubators that produced over a thousand startups in different segments.
“Many of these startups are generating revenue and gearing up for acceleration,” he said. “When you have leading venture capital firms like Kleiner Perkins and 20VC investing in Pakistani startups, then it means that the country is getting ready for the global stage.”
He emphasised that Pakistani startups were the next big thing and many of them were ready for expansion.
“If the uptrend in investments persists, then valuations of mature startups will continue to rise and Pakistan can see its first unicorn (a billion-dollar startup) before 2025,” said the Ignite CEO.
He elaborated that the sectors attracting highest investment included e-commerce, transport, logistics, fintech, healthtech, retailtech and edtech.
Published in The Express Tribune, August 25th, 2021.
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