Pakistan-based Bazaar, a B2B e-commerce and fintech platform, has raised $70 million in a Series B round led by Dragoneer Investment Group and Tiger Global Management, according to an announcement.
Existing investors Indus Valley Capital, Defy.vc, Acrew Capital, Wavemaker Partners, B&Y Venture Partners, and Zayn Capital also participated in the round.
What is Bazaar?
Bazaar’s is a mobile-based B2B e-commerce marketplace designed to allow mom-and-pop grocery stores (locally called kiryana stores) to buy their inventory directly from manufacturers and suppliers.
The B2B e-commerce marketplace now services 21 towns and cities across Pakistan. As per Bazaar, they are able to cover 30% of Pakistan’s population through more than a dozen functional fulfillment facilities.
“Bazaar’s mission is to build an operating system for traditional retail in Pakistan. This retail economy, worth over $170 billion, is primarily offline and mostly served through 5 million SMEs across the country,” the company said in a statement.
Moreover, Bazaar also offers a ledger service called Easy Khata which is used all over the country and not just in cities where the e-commerce marketplace is operational. “The app has onboarded over 2.4 million businesses across 500 cities and towns in the country, recording over $10 billion in annualised bookkeeping transaction value.”
What lies ahead?
Future plans for Bazaar include expanding across the country by breaking into different cities. Bazaar plans to add 3-4 new cities and towns to its last-mile network every month, putting it on course to establish the country’s largest tech-enabled last-mile footprint by the end of the year.
In addition to this, Bazaar Credit is a recently-launched, short-term working capital financing product that provides liquidity to the largely unbanked merchant base in Pakistan.
“To date, Bazaar has provided thousands of digital loans, with 100% repayment and significant uplift in merchant buying volumes. Bazaar’s proprietary credit model incorporates customer data from both its marketplace and merchant software products, giving it a differentiated ability to lend to this underserved segment,” the company said.
With the fresh funding, Bazaar plans to expand into more cities across Pakistan, launch new marketplace categories, scale its lending offerings, and accelerate new product development.
Sources claim that Bazaar plans to become a one-stop solution/application for kiryani stores across Pakistan.
Competiton and challenges galore
However, the challenge for these B2B e-commerce startups lies in the financial structure of the country. Financial inclusion is at a low in Pakistan with a vast majority without a formal bank account which results in a lack of access to credit.
Servicing such businesses become difficult especially considering these kiryana stores have limited working capital.
“Whenever I need to restock supplies, I open up all the apps I have on my phone. I compare prices. I then also call my wholesaler and ask if he can beat the prices. That is how I decide where to order from,” says Bashir Ahmed, the owner of a local general store in Karachi.
He adds, “The reason I call my wholesaler is because I’ve been dealing with him for years. He extends credit to me. I am yet to try credit on the Bazaar app.”
“Sometimes I even check apps like Pandamart on Foodpanda, DMall by Daraaz, KraveMart, and Airlift and compare prices with them. It comes down to prices mostly because survival is tough.”
Kharidar, Tajir, Dastgyr, Reailo, Jugnu are all leading players in the B2B e-commerce marketplace competing against each other in the form of price beating and reliable execution of deliveries. However, B2C apps like Foodpanda, Daraz Mall, Krave Mart, and Airlift also offer competition.
Last month, Retailo raised $36 million in a Series A round. Sources claim that Dastgyr will be announcing its Series A by end-March.
“We are thrilled to support Bazaar’s vision of building an end-to-end commerce and fintech platform for millions of unbanked and offline merchants in Pakistan,” said Christian Jensen, partner at Dragoneer Investment Group. “Bazaar’s pace of geographic expansion and new product development is a testament to the rare talent and culture Hamza and Saad have cultivated at Bazaar.”
“We believe that Pakistan is at an inflection point in its tech ecosystem development. Bazaar is tapping into the massive merchant opportunity and is leading the charge in the country. We are excited to back their incredible team and phenomenal growth in such a short span of time.” said John Curtius, partner at Tiger Global Management.
Bazaar has been able to raise a total of $107.8 million in four funding rounds
Founded in 2020 by two high school friends, Bazaar had raised $1.3 million in its pre-seed round with Indus Valley Capital as its lead investor, this was the largest pre-seed round raised by any Pakistani startup at that time.
Subsequently, Bazaar was able to raise $6.5 million in its seed round led by Global Founders Capital and Indus Valley Capital, followed by $30 million raised in Series A (the largest series A by a Pakistani startup at that time) led by Defy.vc and Wavemaker Partners.
Other investors in Bazaar include Alter Global, B&Y Venture Partners, Next Billion Ventures, Acrew Capital, Global Founders Capital, and Saison Capital.
Co-founders Saad Jangda and Hamza Jawaid are wapitanis (returned to Pakistan to develop and build the ecosystem after studying and working abroad). Jangda is part of the Careem Mafia and has worked as a product manager for ride-hailing and food delivery products in addition to having worked at Snapchat. Jawaid previously worked as a management consultant at McKinsey & Company based in Dubai.