(Bloomberg) — Pakistani raw-materials procurement platform Zaraye raised capital from Tiger Global Management, signaling increasing interest by the world’s top venture investors in the country’s startups after they obtained record funding last year.
The $2.1 million pre-seed round marks Tiger’s first such an early-stage investment in Pakistan and was co-led by Zayn Capital, the Karachi-based upstart said in a statement Thursday. Founded in late 2021, Zaraye helps manufacturers procure raw materials and finance their working capital.
Starting from a low base, the world’s fifth-largest nation is starting to attract venture investors with companies including Kleiner Perkins and Dragoneer Investment Group recently making their first bets in the country. Pakistan had a breakout year in 2021 with startups raising more than $350 million, greater than the amount over the previous six years combined.
Industrial manufacturing makes up 20% of Pakistan’s economy, with the $35 billion raw-materials market accounting for as much as 65% of manufacturers’ costs. Zaraye aggregates multiple buyers and suppliers, reducing the need for manufacturers to make multiple phone calls to get prices, Ahsan Ali Khan, co-founder and chief executive officer, said in an interview.
Zaraye, founded by three university friends, serves customers across textile and construction industries. It also provides financing to small and medium enterprises that find it difficult to get loans from banks.
“Procurement in the manufacturing industry is a massive problem with similar models showing immense success in comparable markets,” said Faisal Aftab, managing partner and co-founder of Zayn Capital BitRate Fund.
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