Pakistan’s B2B ecommerce startup Jugnu, which connects small businesses with suppliers, has raised $22.5 million in the form of initial strategic investment from MENA-based Sary.

The round was led by Sary, with participation from Pakistani venture capital fund Sarmayacar and Pakistani digital technology company Systems Limited, read a statement issued by the company on Thursday.

The funding will be used to accelerate the development of Jugnu's B2B ecommerce ecosystem and strengthen the country's retail supply chain.

“Jugnu has focused on developing strong capabilities and moats in key markets during the last 18 months, leveraging our product-market fit to grow rapidly during this period," said Sharoon Saleem, co-founder and CEO. "This round of investment will enable us to expand our team, ramp up our technological platform, expand product offerings and extend our geographical footprint."

Pakistan is home to over a million small-scale grocery shops (kiryana stores) that lack access to convenient inventory procurement, according to the company.

“Over two-thirds of the retail stores are never serviced directly by any organised distribution channel,” said Jugnu.

Founded in 2019, the startup currently covers a customer base of over 30,000 kiryanas across Lahore, Rawalpind and, Islamabad, with expansion to other major cities underway.

Commenting on the investment, Mohammed AlDossary, Co-Founder and CEO of Sary, said: “In a relatively short period of time, Jugnu is rapidly positioning itself as the platform of choice for kiryanas across Pakistan’s cities, demonstrating strong traction amongst its customers. As they continue to realise the market opportunity Pakistan brings, I look forward to working closely with Jugnu’s leadership to unlock the possibilities of local trade, bridging efficiency gaps in MENAP and beyond.

The strategic investment and alliance with Sary allows Jugnu to consolidate in the B2B space in MENAP."

Karachi-based Bazaar Technologies raises $30mn in Series A round

Speaking about the alliance with Sary, Saleem said: “Our new alliance with Sary will be a great boost for Jugnu. We’ve established a foothold in our existing operating cities with a rapidly growing customer base, and Sary will help us accelerate the development of our platform to connect producers and businesses.”

Pakistan's startups have been on a fund-raising spree in recent times, grabbing the interest of both local and international investors.

Just days ago, Bazaar Technologies, a Karachi-based B2B ecommerce platform, announced it had secured $70 million in funding.

The country attracted a record amount of investment in 2021 with 81 deals, securing roughly $350 million, according to Invest2Innovate (i2i). The amount raised is more than 5x of what was raised in 2020 i.e. $65 million.

Pakistan's startups in 2021: $350mn raised across 81 deals.

This story was first published in Business Recorder on March 24, 2022.