Monday Nov 29, 2021
Amid the ongoing digitisation in Pakistan, a startup — PostEx — completed one of the country’s largest early-stage funding to help with its expansion plans.
PostEx, a provider of courier and financing to e-commerce companies, raised $8.6 million through multiple tranches in its seed funding, according to its founder Muhammad Omer Khan, Bloomberg reported.
Per details, the latest tranche of the Lahore-based Startup was led by Global Founders Capital, and also included first-time investments by FJ Labs and RTP Global in Pakistan.
The year 2021 was a breakout year for the startups in Pakistan as over $300 million has flowed into Pakistan’s nascent technology sector during the outgoing year, more than in the previous six years combined.
PostEx, which began in April, provides a platform for e-commerce businesses helping them solve working capital problems “by giving them cash before making deliveries and providing them finance to run their businesses.”
Per Bloomberg, the mastermind behind this startup moved back to Pakistan from Dubai to start the venture after discovering more than 90% of the country’s online shopping is done with post-delivery cash payments rather than electronic transactions, resulting in the funds of businesses being held up for weeks.
“The space has been underserved by traditional financial providers. Banks would not loan to e-commerce platforms because they don’t have anything to put as collateral,” Khan said in an interview. “We know their business. We understand that they are growing very fast. So why not just use that as collateral?”
According to the company’s plan, the firms that have been given funds will use those to expand into 15 to 20 more cities in Pakistan, increase their workforce and launch more fintech products, he said.
Khan estimated that Pakistan’s e-commerce industry has lured the most investment in the recent funding rush.
“The majority of the population still hasn’t switched to online shopping, providing room for the sector to grow and transactions to reach $10 billion before 2025 from about $6 billion now,” Khan said.
The held-up cash “was slowing growth down for e-commerce companies,” Khan said, adding, “We’re trying to build a solution and help them grow.”