Trax has raised $3.7 million in an early seed round as it seeks to capitalise on growth in the South Asian country’s nascent e-commerce market.
In a round sponsored by Amaana Capital and Tricap Investments of the United Arab Emirates, the company raised $3.7 million. Trax, a pioneering logistics player in Pakistan’s e-commerce sector, was founded in 2017 during a period when venture capital funding was scarce in the country.
Multiple rounds backed by global venture capitalists are taking place this year, indicating that the startup economy is gaining momentum. Last year, venture funding in the country remained unchanged at $350 million despite a worldwide decline in tech startup valuations.
Trax performs one million deliveries per month and employs over 2,000 individuals. To improve financial inclusion in Pakistan, it wants to expand into new business areas, such as fintech.
The company intends to use the investment to accelerate the expansion of its logistics services and introduce new business verticals, such as fintech and technology solutions for its customers.
Despite all odds, funding for Pakistani startups remained acceptable in 2022 despite a 7% decline in comparison to the previous year.
In 2021, startup funding decreased to $347 million from approximately $375 million. Despite political challenges, currency volatility, devastating floods, high inflation and interest rates amid the Russia-Ukraine war causing energy and food price shocks, followed by global recession fears due to massive tightening, investments in Pakistani startups persisted, according to a report by Alpha Beta Core.