Pakistan-based B2B marketplace startup Bazaar has raised $1.3 million in pre-seed funding led by Indus Valley Capital. The round was also joined by Alter Global, a Silicon Valley-based emerging markets fund, as well as other angel investors.
The Karachi-based company operates in a similar space as India’s Udaan, Vietnam’s Telio and Indonesia’s GudangAda, positioning itself as an online marketplace bridging the gap between wholesale suppliers and food/grocery retailers.
According to reports by Planet Retail and MarketLine, Pakistan’s retail industry is worth about $150 billion of which around $60 billion is in groceries. Most of these transactions are still done offline. Dry staples like rice, flour, sugar and edible oils – which Bazaar currently focuses on – are sourced physically by retailers who depend heavily on middlemen to buy and sell goods.
Bazaar’s aim is to tackle the inefficiencies in this highly traditional sector, which include aspects like opaque pricing and inconvenient sourcing methods. The company kicked off operations in April right in the middle of the COVID-19 outbreak. Its co-founder Hamza Jawaid explained that the coronavirus had turned out to be the very impetus for accelerating Bazaar’s business.
“We had spent many months studying the market opportunity here. When the first COVID-19 infections broke out in Pakistan, we thought there was no way we could launch this,” shared Jawaid. “But we began to notice that the lockdown had forced shorter operating hours for retailers so the problems for these retailers became even more severe. It added impetus for us to launch even sooner.”
This new round of venture capital arrived quickly upon launch, which Bazaar will now use to increase the number of retailers, wholesalers and suppliers on its platform. It will also look into developing its technology base and expanding its commercial, growth and operations teams.
“Bringing the fragmented B2B retail market online is one of the biggest startup opportunities in Pakistan. I have tracked it for over a year and have been waiting to back the right team to go after it. Bazaar’s founding team is phenomenal on all fronts – product, strategy and execution. Indus Valley Capital is really excited to partner with them,” said Aatif Awan, founder of Indus Valley Capital.
We reported in February this year that Indus Valley Capital was raising $15 million for its first Pakistan-focused fund. The newly-established VC has joined the ranks of Sarmayacar, i2i Ventures and Fatima Gobi Ventures, all of which are also newly-launched funds investing solely in the Pakistani market.
Bazaar was co-founded by Hamza Jawaid and Saad Jangda, former senior executives at McKinsey and Careem respectively.
Jawaid was a former management consultant at McKinsey where he worked on strategy, operations and digital projects in finance, real estate and public sectors across the Middle East and Pakistan. Jangda was a former product manager at Careem, where he helped launch the mobility company into new verticals such as concierge, pharmaceuticals and groceries.
