Funding of startups tops $300mln in 2021

KARACHI: A funding frenzy in Pakistan’s startup scene this year has seen investments cross $300 million after two e-commerce companies raised fresh funds, Bloomberg reported on Thursday.

Bookme, the largest online travel and ticketing platform in the country, raised $7.5 million in its Series A round, according to its founder Faizan Aslam.

Bookme is the first completely cashless platform in Pakistan with the highest number of day-to-day digital transactions for banks and payment gateways.

Bagallery, a beauty and fashion startup, separately raised $4.5 million in a similar round, co-founder Salman Sattar said. Both rounds were co-led by Zayn Capital, Lakson Venture Capital and Hayaat Global.

Bagallery sells beauty and fashion products for women, men, and kids, from over 500 brands including L’Oréal, Garnier, and Paul Mithcell. Moreover, its catalog features 10,000 SKUs ranging from beauty, skincare, haircare, and perfumes to clothing, shoes, bags, and accessories.

“Bagallery focuses on authentic supply for products by entering into partnerships with likes of Unilever, Procter & Gamble, L’Oreal, and Kiko Milano. This gives us competitive access to brands sought by its target demographic consumers,” noted a statement by Bagallery. The South Asian nation has seen more money flow into its nascent technology sector during 2021 than in the previous six years combined. Many global venture capital firms have invested in Pakistan for the first time in the current wave including Kleiner Perkins, an early investor in Google and Amazon.com Inc.

Pakistan's startups raise record $310 million in 2021. Pakistan’s e-commerce industry is just picking up with online retail accounting for about 2 percent of gross domestic product, compared with 20 percent in Indonesia. Alibaba Group Holding Ltd.’s Daraz Group, the largest e-commerce company in Pakistan, expects to double its retail volume every year over the next five years, sustaining the pace of the past four years. Fashion is the largest segment within e-commerce and Bagallery founders believe there will be as many as four unicorns in Pakistan in the next seven years. The country has none so far.

Pakistan’s e-commerce sector is taking off as the industry continues to rake in massive investment. According to data published by the State Bank of Pakistan, the number of registered e-commerce merchants increased from 1,707 in 2019-20, to 3,003 in 2020-21, a 76 percent increase.

Furthermore, Pakistani startups received a record total of $300 million in investment this year. As a result, experts predict that the funding will continue to grow.

Earlier, a Lahore-based startup called PostEx banked in mega funding of $8.6 million, making it one of the country’s largest.

Interestingly, the credit goes to Covid for boosting the e-commerce sector. The frequent lockdowns halted in-person operations. As a result, many businesses moved online. Additionally, startups also increased.