(Bloomberg) — Pakistan’s Dastgyr Technologies Pvt., which aims to create an e-commerce platform similar to Alibaba Group Holding Ltd. for emerging markets, raised $37 million in the country’s largest-ever Series A funding.
The venture arm of telecommunications operator Veon Ltd. led the fundraising by contributing about 40% of the investment. The Dutch-domiciled giant serves more than 217 million customers in nine countries and is the largest mobile phone service provider in Pakistan.
Dastgyr’s funding is a bright spot for the South Asian nation that has suffered from the global tech downturn after a breakout year in 2021. Uber Technologies Inc.’s Careem Inc. unit has suspended food deliveries in the country, Dubai-based Swvl Holdings has paused operations and Airlift Technologies Pvt. has fired a third of its workforce.
“Pakistan’s startup ecosystem is at a critical juncture and only startups focused on addressing key challenges and adopting local solutions will survive and thrive,” said Aamir Ibrahim, chief executive officer at Jazz, Veon’s local unit.
Pakistan is mostly a cash-based economy but startups are looking to change that. Dastgyr, which means “helper,” is a one-stop platform that connects retailers such as grocery stores with multiple suppliers such as Nestle SA and Reckitt Benckiser Group Plc. Most traditional stores currently meet 100 suppliers a week or physically browse different markets to stack its shelves.
The online marketplace that started less than two years ago has been used by about 100,000 retailers in the five cities it operates. It seeks to keep costs low by connecting buyers and sellers over a digital platform, rather than buying and storing everything in physical warehouses. It plans to expand into 15 new markets in Pakistan and expand into a new country in 2022.
The company continues “to work relentlessly toward our vision of building an Alibaba for emerging markets worldwide,” said Zohaib Ali, co-founder of Dastgyr.
The round also included Zinal Growth Fund, DEG, Khwarizmi Ventures, Oman Technology Fund, Cedar Mundi Ventures, Reflect Ventures, Century Oak Capital, Haitou Global, GoingVC, Astir Ventures, K3 Ventures, and Chandaria Capital. Existing investors SOSV, Edgebrook Partners, and EquiTie also participated.
Dastgyr has started a Buy Now Pay Later offering and plans to introduce lending products for its sellers as well. It aims to become a unicorn in the next few years, Muhammad Owais, another co-founder, said in an interview.
While the company started by catering to grocery stores, it’s now venturing into new business-to-business categories, including cement, steel and other building materials. It is also looking at electronics, pharmaceuticals and other retail sectors, said Owais.
The funding marks another step in Veon’s evolution beyond traditional telecommunications. It has also applied for a digital banking license in Pakistan.
“As part of Veon’s transformation into a digital operator that delivers a growing range of services to our customers we are investing in leading digital companies like Dastgyr in the countries where we operate,” said Mohammad Khairil Abdullah, CEO at Veon Ventures. “These investments are the building blocks of the digital ecosystem that will enable us to deliver on our strategy.”
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