A Pakistani startup, which took inspiration from China’s JD.com and India’s Flipkart to build a managed marketplace for electronics products, said Tuesday it has raised seed funding from dozens of investors including PayPal founder Peter Thiel.
Launched in March 2020 – just two weeks before the COVID-19 pandemic hit the world – the Islamabad-based startup price It offers a range of electronic products, including smartphones, televisions, and home appliances.
Its seed funding round was led by JAM Fund, a venture capital firm by Tinder founder Justin Mattin. The institutional funding round also included the participation of Beninnext, DJ Daiwa, Mantis VC, Hof Capital, Jet.com investor Palm Drive Capital and Atlas Ventures, among others. Also on the tour were angels including Thiel and Immad Akhud of Mercury Bank and Asif Keshodia of Souq – along with former investors Fatima Gobi Ventures, SOSV and Artistic Ventures. This is Thiel’s first investment in Pakistan.
Adnan Shafi, co-founder and CEO of the startup, told TechCrunch in an interview that PriceOye has served 45 million unique users in Pakistan in the past two years, covering 37.5% of the country’s total internet user base.
“We are the second most visited shopping site in the entire country, with more than two and a half million monthly active users coming on the platform, doing research using our product recommendation engine and then learning about different products,” he said.
After exiting two startups, Adan and his brother Adeel Shaffi came up with the idea to launch PriceOye when they were doing “a lot of island hopping” in Southeast Asia. The duo looked at several startups in Indonesia and India and found that Asian markets are seeing similar consumer internet trends emerge – only at a different pace. They have put forward the thesis that Pakistan will see similar adoption of consumer internet services in the next four to five years.
This is the genesis of PriceOye.
Adnan said the duo decided to follow the managed market model, where only brands and their official representatives are allowed to sell products, to reduce instances of fraud and common errors that have proven painful for traditional online marketplaces.
“We realized that in the market, where trust is one of the biggest factors, and there is a lot of lack of trust between the consumer and the brand, the only way the market can function is the managed market model, which originally started in China from JD.com, then It was copied by Flipkart, and many other players in Southeast Asia,” Adnan said.
PriceOye sees that 30% of repeat users of its entire customer base visit the platform regularly to purchase consumer electronic goods. The startup also claims to sell four smartphones to one user per year on average.
It is the largest online platform for selling mobile phones and accessories in Pakistan, Adnan said, adding that 35% of the total orders come from second and third tier cities across the country.
“Within a short period of time, PriceOye has grown exponentially and solidified its position as the national leader in online consumer electronics. Alex Pall, founder and partner of Mantis VC, said in a prepared statement, “We are excited to join PriceOye in its mission toward changing the way people shop in Pakistan”.
PriceOye is looking to deploy the new funding to expand its 97-member team by recruiting new talent. It also plans to bring its platform closer to people in the country by launching offline experience centers – starting with three in high-end malls across Islamabad, Karachi and Lahore. More new products and categories are in the pipeline for the platform of the same name.
Prior to the latest round, PriceOye raised $450,000 in seed funding from Fatima Gobi Ventures, Artistic Ventures and SOSV.
“It is always a difficult choice for consumers to spend large amounts of money on high-value products while not being sure of their authenticity. Simon Chan, Managing Partner at Palm Drive Capital, said in a statement: “I have been inspired by PriceOye founders Adnan and Adeel’s vision to create transparency and provide convenience to customers when It’s about shopping for consumer electronics.”