Pakistan’s PostEx raises $7.3 million Series A round to expand its platform for e-commerce merchants to Saudi Arabia

🚚 Pakistani startup PostEx, which offers financial and logistics services to online merchants, is gearing up for market expansion, starting with Saudi Arabia this year, followed by the UAE. This comes on the heels of raising a $7.3 million pre-Series A round.

• Founded in 2020 by Omer Khan, Saad Mahmood, Babar Razzaq, and Adil Naseem, PostEx initially began as a third-party logistics provider for e-commerce merchants. It has since evolved into a comprehensive platform offering Shariah-compliant, non-dilutive financing to resolve cash flow challenges for merchants.

💰 Investor lowdown: The round was led by Dubai-headquartered Conjunction Capital, along with Dash Ventures, Sanabil500, VSQ, FJ Labs, and Zayn VC.

• Prior to its pre-Series A, PostEx had raised $8.6 million from investors including Global Founder Capital, MSA Capital, and Shorooq Partners.

⚙️ Break it down

Online merchants in Pakistan face growth barriers due to 95% of transactions being cash on delivery, causing working capital constraints as couriers take 10-15 days to settle payments.

PostEx addresses this issue by providing upfront payments for cash-on-delivery orders, coupled with integrated logistics services.

🐂 PostEx bull case

1. Leveraging its role as a logistics partner, enabled PostEx to gain deep insights into e-commerce merchants, enhancing its ability to offer tailored financing solutions. They’ve provided $90 million in loans to over 8,000 businesses to date.
2. In August 2022, PostEx expanded its logistics network by acquiring Call Courier, growing from three key markets to over 650 cities.
3. The startup became profitable in November last year, reaching $21 million in annual recurring revenue with 4 million monthly transactions, and is on track to surpass $25 million by year-end.

🔮 Flashforward

In the next three months, PostEx plans to enter Saudi Arabia and raise an additional $15 million to bolster its presence there. It’s applying for a financing license and has launched a pilot with local merchants.

Simultaneously, PostEx is testing its platform in the UAE, with plans to launch after establishing itself in Saudi Arabia.

Back home in Pakistan, PostEx aims to expand its workforce from 6,500 to 9,000 across 600 cities by the end of the year.