Pakistan’s first fintech and logistics hybrid firm PostEx today disclosed raising an additional $7.1 million in seed funding to enable eCommerce businesses with upfront payments for cash-on-delivery orders, digital payments, and delivery solutions.
The additional round raises the total raised in seed capital to $8.6 million. PostEx commenced fundraising for the seed round early this year and disclosed raising the initial $1.5 million only two months ago.
Profit has seen records that confirm the amount raised in the seed round of PostEx.
The latest round was led by US-based Global Founders Capital, which has before invested in Pakistan’s banking company SafePay, B2B eCommerce platform Bazaar, and delivery service Rider. The round also featured participation from US-based venture capital firms FJ Labs, ru-Net, a fund of RTP Global, and Alma Capital.
Both RTP Global and FJ Labs made their initial investment in Pakistan in PostEx.
The business had earlier been backed by China’s MSA Capital and Shorooq Partners among others.
Omer Khan, the CEO, and creator of PostEx said that the need to extend the seed round emerged to fund the expansion of the firm, which he claims experienced a 350% rise in a matter of a few weeks after the initial tranche was released.
In Pakistan, cash-based payments represent the vast bulk of the economic transactions which poses liquidity challenges for eCommerce enterprises because of the protracted cash recovery cycles for cash-on-delivery orders. Inefficient logistic infrastructure produces last-mile delivery issues which lead to increased cancellations for merchants.
Coupled with the absence of financing choices, Pakistan’s eCommerce scene has a sluggish expansion, forming only approximately 1-2% of the overall retail.
Founded in 2019 by Omer Khan, Saad Mahmood, Babar Razzaq, and Adil Naseem, PostEx’s fintech-first platform addresses both challenges by providing upfront payments on cash on delivery orders, complemented by an in-house logistics fleet for eCommerce businesses, thereby helping businesses grow via easy and instant access to cash and liquidity and seamless delivery experience.
As digital payments picked up, assisted by the Covid-19 pandemic, PostEx also released digital payments services this year, providing an all-encompassing platform for online merchants to handle their financial flows, payments, and delivery. The freshly raised funds are also going to be utilized towards enhancing existing and introducing new digital payments solutions for a better digital payments experience for businesses and their consumers.
The balance is going to be utilized to fund geographical development and grow the PostEx workforce, currently at 150 workers.
PostEx’s competition in the space includes Rider, Swyft, and Trax, among the heavyweights TCS and Leopards. But PostEx’s fintech-first approach makes it reach out to businesses with the value proposition of solving their liquidity difficulties first, coupled with a delivery service.
This method has helped PostEx grow by signing up merchants for financing their invoice values upfront, on which PostEx earns by charging a commission. The retailers might select delivery services as well.
This technique has helped PostEx gain a share in the eCommerce delivery sector as well which is saturated with the presence of at least 14 delivery firms.
Kirill Kozhevnikov, a partner with ru-Net, a new fund of RTP Global family, said: “Very excited to partner with Omer and team-PostEx, – they are our first commitment in the region. VC has no geographical limits, and we see significant potential in growing markets such as Pakistan, Bangladesh, and MENA. The big and growing market, the revolutionary company concept, and extraordinary entrepreneurial talent — our must-haves criterion for portfolio firms – were matched on the 20th minute of the first meeting. Looking forward to building something big together!”
Tito Costa, Partner at Global Founders Money said: “PostEx offers a unique product to e-commerce players in the Pakistani ecosystem, allowing them to unlock precious capital to accelerate their growth. We are delighted to back the team as they grow out their array of finance and fulfillment products.”