Thursday July 18, 2024

Zaraye raises $2.1mn in pre-seed funding

By Bilal Hussain
April 15, 2022

KARACHI: Karachi-based raw materials marketplace Zaraye has raised $2.1 million in pre-seed round led by Tiger Global and Zayn Capital, a company statement said on Thursday.

Founded in late 2021, it’s a business-to-business platform that helps manufacturing businesses procure raw materials and finance working capital.

It is currently serving clients across textile and construction industries, with over 300 partners and suppliers spread out in more than 20 cities.

Other investors include +92 Ventures, Alan Rutledge, Jack Rizvi, and current and former Careem employees holding key positions in their tenures. This is Tiger Global’s first pre-seed investment in Pakistan.

Pakistan’s industrial manufacturing sector contributes to 20 percent of the country’s economy with a $35 billion raw material market annually. Raw materials contribute 60-65 percent of the total costs for the manufacturers.

“In conditions where net margins are thin, finding efficiency in costs becomes critical for these businesses to win orders and sustain against competition locally and globally,” said Zaraye co-founder Hashair Junaid Ahmedani.

“Being a part of the industry for so long, and realising the gap, invoked an urge to address these shortcomings and become a part of the solution,” he added.

He was of the view that small and medium enterprises (SMEs) had always found acquiring financing a huge battle for their businesses from financial institutions, and were forced to turn to informal markets with around 2.5 times premiums.

“Small and medium size business owners have been trapped in a cycle of high competition and lack of financing options. Zaraye aims to help these businesses scale as they find the efficiencies in procurement and financing options to make better decisions for their businesses.”

Zaraye is available across platforms with their iOS, android and web app. The platform helps buyers of raw materials connect with multitude of suppliers who furnish their quotes in real-time making the process faster and hassle free. The marketplace CEO and co-founder Ahsan Ali Khan said they aimed to contribute to strengthening the country’s economy by helping entrepreneurs in finding avenue to optimise and scale.

Traditionally a manufacturer would connect with a handful of intermediaries or directly with the suppliers with a tedious process of going through multiple phone calls, and wait for them to furnish rates, he added.

“This process is longer, tedious, and brings limited options for buyers to make a decision. With Zaraye, buyers of raw materials can simply post their requirements for required products and

relevant suppliers can furnish quotes in real time.”

He explained that suppliers could access consolidated demand volumes with the platform, adding, they had registered suppliers from over 20 cities, and those who could procure were from Karachi and Faisalabad.