- Karachi-based startup announces raising funds in round led by ADB Ventures, Global Founders Capital, Fatima Gobi Ventures among others
Rider, a Karachi-based last-mile delivery partner for e-commerce retailers, has raised $2.3 million in a seed round, the company announced on Wednesday.
The round was led by venture capital (VC) firm Global Founders Capital, Fatima Gobi Ventures, and the Asian Development Bank's ADB Ventures. TPL E-Ventures and Transhold also participated.
The Karachi-based B2B2C service was launched in 2019 by Salman Allana, who was previously head of strategy and business development at UPS Pakistan and assistant vice president at Citi Bank.
The startup is looking to utilise the latest funds to expand its network and integrate its value chain.
At present, Rider provides services in over 80 cities across Pakistan, with clients including Pakistan’s top five online retailers such as Khaadi and Daraz.
The funding comes as a positive for the South Asian country, which aims to achieve nearly 5% GDP growth in the ongoing fiscal year.
In just nine months of 2021 (January-September), Pakistan's startups raised a record amount with investments at over $305 million, according to data compiled by Karachi-based Alpha Beta Core (ABCore), an early-stage tech-based investment firm.
The amount is over 1.5 times higher than the previous six years combined with investments focused on early-stage funding rounds, pointing to the growth potential, say experts.
“We’re excited about the investors we have on board – they collectively bring unparalleled logistics industry expertise and emerging markets exposure. Their capital injection will enable Rider’s plans to expand our network and integrate our proven last-mile service into other key parts of the value chain,” Salman Allana, founder and CEO of Rider, was quoted as saying in the statement.
As a result of accelerated digitisation driven by the Covid-19 pandemic, Pakistan’s e-commerce market is projected to record a compound annual growth rate of 16%, reaching $10 billion by 2025, said the company.
The logistics market, a key cog that supports Pakistan’s e-commerce growth, is incredibly fragmented, with traditional players and second or third generation startups competing for a share of the high-volume, operationally driven industry, added the statement.
“When we launched Rider, only 80-85% of deliveries in Pakistan were making it to the customers’ doorsteps, translating millions of dollars lost, operational inefficiencies and frustrated shippers and customers," said Salman.
“Our tech has improved this, while our operations identify and solve the underlying causes behind these stats. For instance, Rider’s in-house delivery agent behavioral analysis and geo-tagging processes help eradicate fake delivery attempts."
Meanwhile, Ali Mukhtar, General Partner for Fatima Gobi Venture, said Rider’s belief that ‘technology moves everything’ has already raised the bar on delivery lead times, cash repayment cycles and delivery success rates in Pakistan’s logistics industry.
Fatima Gobi Venture, which took part in the funding round, also has portfolio investments in Truck It In, Safepay, and online marketplace Bazaar.
Jay Lim, Venture Partner at Global Founders Capital that also participated, said Pakistan's startup scene offers great potential.
“GFC believes that Pakistan's startup scene is primed to grow rapidly in the next few years, especially within the commerce space. We have invested in a number of founders in Pakistan recently and will invest in more in the coming year,” said Jay Lim.