A number of high-profile firms and startups have set up logistics networks in India in the last decade as they attempt to digitize neighborhood stores.

Bangalore-headquartered startup Udaan, for instance, works directly with brands and sellers to source inventory and sells and delivers it to stores through its business-to-business marketplace. It’s a big opportunity. Most neighborhood stores that dot tens of thousands of cities and towns in India are still offline.

The startup has warehouses spread across the country, several in New Delhi and Gurgaon.

If you travel a few hundred miles west, things look very familiar. Pakistan has several similarities to India: its cities are just as dense and populated, for one. But the startup ecosystem in the nation, which is much smaller than India in size and population, is still in its nascent stage.

But slowly, global investors who arrived in India and other Asian markets in the last decade are beginning to look at Pakistan and bet on startups that are solving similar challenges.

Tajir, a Lahore-headquartered startup, today serves more than 15,000 neighborhood stores, locally known in the region as kirana, across Pakistan.

The two-year-old startup, the first startup from the nation to be backed by Y Combinator, said on Friday that it has closed a new financing round.

Pioneer Fund, Golden Gate Ventures, Fatima Gobi Ventures, Karavan, and VentureSouq led the round, with participation from a clutch of angel investors, Tajir co-founders Babar Khan and Ismail Khan told TechCrunch in an interview.

Tajir offers full transparency on the prices of various products, addressing a challenge that store owners confront offline each day, and sells and delivers inventories to the stores, said the Khan brothers, whose father ran an FMCG retail distribution business for three decades.

“We help store owners save money on inventory and help them boost their sales,” said Ismail.

Like in India, offline retail drives the vast majority of sales in Pakistan. “The retail is even more unorganized here compared to neighboring nations,” they said. There’s no Amazon or any major giant running an e-commerce business for consumers in Pakistan today.

For Babar and Ismail, that’s a big opportunity as they scale. According to official government data, there are about 2 million neighborhood stores in Pakistan.

Tajir is gaining ground in the country today mostly through word-of-mouth endorsement from existing partners, though the startup also maintains a sales team to educate more store owners about their platform.

It plans to use the capital to expand its offering and develop more services that stores need to grow their business, the brothers said. These offerings could include a wider catalog of inventory, and access to financial services, they said.

“We want to offer an essential service to every single mom-and-pop store in Pakistan,” said Babar.

Tajir today does not have any major competitor, which is good news as a lot is riding on its founders’ shoulders who are among the early batch of entrepreneurs in the country. In many ways, their success will determine the perception of the Pakistani market to investors worldwide.

Originally published at techcrunch.com

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