Pakistani startup PostEx, providing monetary and logistics companies to on-line retailers, is about to enter new markets, starting with Saudi Arabia this yr, TechCrunch has completely discovered.
“We want to go into other markets to really disrupt them because we see the gap,” mentioned Muhammad Omer Khan, founder and CEO of PostEx, in an interview.
E-commerce in Pakistan, which presently sits at round 1.5% of its whole retail market, has grown 50% within the final 12 months. PostEx is a possible contributor to that progress.
On-line retailers in Pakistan discover it difficult to maintain their enterprise and obtain progress, as 95% of transactions are paid with money on supply. Courier firms within the South Asian nation take 10 to fifteen days to settle these transactions from the dispatch time to supply. All this results in working capital points for on-line retailers.
In 2020, Khan based PostEx to unravel these points by giving retailers upfront funds towards cash-on-delivery orders, and an connected logistics service. After getting regulated as a non-bank monetary establishment in Pakistan, the startup additionally launched a progress capital providing for on-line retailers. Nonetheless, to scale back dangers, the startup doesn’t present pure monetary help to retailers, and solely offers them credit score in the event that they use its logistics service.
Khan informed TechCrunch that this mannequin has helped PostEx preserve its non-performing loans under 0.03% since inception.
“Because we control the flow of the funds, meaning that if we are giving the credit, we’re doing the deliveries on our own, and then we’re collecting the cash directly from the consumer,” he mentioned.
The co-founder added that of its energetic 15,000 service provider base, over 80% service provider have signed up purely for upfront funds with logistics, whereas the remaining 20% are utilizing solely its logistics service.
Initially, PostEx began the monetary service from its personal fairness, as Pakistan’s capital controls makes it laborious to lift vital debt from conventional lenders. Nonetheless, because it scaled and obtained a confirmed variety of retailers and credit-payback historical past, the startup started working with typical banks to supply loans to retailers immediately from their stability sheets.
PostEx expanded its logistics footprint in Pakistan by buying rival Name Courier in August 2022. The acquisition helped the startup develop its market from three key markets to over 650 cities in a single go. It additionally enabled onboarding smaller companies and enterprise prospects — alongside giant retailers — to turn into a nationwide service for e-commerce firms of all sizes.
Khan mentioned that simply over a yr after Name Courier’s acquisition, PostEx turned worthwhile in November final yr. It additionally just lately crossed an annual recurring income price of $21 million, with 4 million month-to-month transactions, and tasks to surpass $25 million by the top of this yr.
“There is no cost of acquisition, except there is only just the cost of debt or cost of capital,” he mentioned. “So, we are focusing on healthier margins for profitability… we’re growing 10–15% month-on-month.”
Getting into new markets with $7.3M in new funding
The startup has now raised $7.3 million in an all-equity funding spherical led by Dubai-headquartered Conjunction Capital to sketch out its market enlargement, which plans to transcend Saudi Arabia and stretch to the United Arab Emirates (UAE) over time.
Within the subsequent three months, PostEx plans to enter Saudi Arabia. The startup additionally appears to lift one other spherical of $15 million to double down within the new market. Talks for the brand new spherical with traders are ongoing, Khan asserted.
PostEx can be testing its platform within the UAE and already has a license for financing. It plans to launch there after efficiently cracking the Saudi Arabian market.
For Saudi Arabia, Khan informed TechCrunch that PostEx will apply for a financing license with the native regulator, the Saudi Central Financial institution. In the meantime, it has began a pilot within the nation with a handful of small and medium on-line retailers and one or two giant gamers by tying up with native financing companions.
On the identical time, PostEx plans to increase its presence in Pakistan, increasing its headcount of 6,500 throughout 600 cities to 9,000 by the top of the yr.
“We anticipate growth in certain cities more as compared to other cities. So we invest in those cities more,” Khan mentioned.
The startup can be testing a digital funds service for on-line retailers in Pakistan, permitting them to digitize funds on the doorstep or checkout web page. It already gives an expense administration system to retailers to assist them handle salaries, provider and vendor funds and bills by means of a single portal.
PostEx’s most up-to-date spherical additionally noticed participation from Sprint Ventures and Sanabil500 in addition to its current traders VSQ, FJ Labs and Zayn VC. Earlier than this spherical, the startup raised $8.6 million.
