Dastgyr, a Pakistan-based B2B e-commerce marketplace platform, has raised $37mn in a Series A investment round lead by Veon Ventures, Bloomberg reported, adding that this is country’s largest-ever Series A funding.

$15 million of the funds, about 40%, come from the corporate venture arm of Veon, a multinational telecommunication services company that is also the largest mobile phone service provider in Pakistan.

Veon Ventures’ investment in Dastgyr Series A funding was made alongside Zinal Growth Partners, DEG, Khwarizmi Ventures, Oman Technology Fund, Cedar Mundi Ventures, Reflect Ventures, Century Oak Capital, Haitou Global, GoingVC, Astir Ventures, K3 Ventures, Chandaria Capital, along with the founders of Property Finder, Ayoconnect, Quiqup and senior management from DoorDash.

According to a press release issued on Tuesday by Veon Ventures, the deal is its largest investment in a Pakistani start-up and reflects the Group’s continued commitment to the region and growth of the digital economy of Pakistan.

As part of the deal, Dastgyr will remain an independent entity, with a minority position being taken by Veon Ventures.

Co-founded by Muhammad Owais Qureshi and Zohaib Ali during strict lockdown conditions in 2020 with a total investment of $300,000, Dastgyr was launched with the aim of resolving inventory procurement challenges for more than 2 million retailers across Pakistan.

The new investment will be utilised to fund Dastgyr’s expansion into 15 new regions in the country, alongside its existing network in Karachi, Lahore, Sheikhupura and Gujranwala.

Mohd Khairil Abdullah, CEO of Veon Ventures, expressed that the investment in Dastgyr is part of the company’s strategy to transform itself into a digital operator.

“We are investing in leading digital companies like Dastagyr in the countries where we operate. These investments are the building blocks of the digital ecosystem that will enable us to deliver on our strategy,” said Abdullah.

Dastgyr offers businesses a one-stop-shop application that connects thousands of retailers with suppliers to give them access to real-time visibility on pricing and financing rates.

“We are thrilled to achieve this milestone in the current global economic environment,” said Zohaib Ali, co-founder of Dastgyr, who aims to build an Alibaba-like platform for emerging markets worldwide.

“Financial inclusion, which is central to the startup’s mission, will uplift and enable Pakistan’s small- and medium-sized retail entrepreneurs and unlock up to an additional US$ 10 billion for the country’s GDP, according to our estimates.”

Pakistan’s startup sector witnessed its best year in 2021, as 81 deals worth $350 million were inked. The amount raised was more than 5x of what was raised in 2020 i.e. $65 million.

2022 was off to a good start as well: During the first quarter, startups raised a substantial $163 million, according to a Deal Flow Tracker by Invest2Innovate.

However, more recently things have been bumpy: in the last few weeks Swvl announced it is suspending its intra-city services “in light of the global economic downturn” and Airlift said it’s slashing its global headcount by 31%. Logistics startup Truck It In also announced layoffs.

“Pakistan’s start-up ecosystem is at a critical juncture and only startups focused on addressing key challenges and adopting localized solutions will survive and thrive,” added Aamir Ibrahim, CEO of Jazz, which is owned by Veon.

Veon said the investment positions Dastgyr to take advantage of its global expertise as well as Jazz’s distribution network and digital payment solutions via JazzCash.