YC-backed logistics start-up scoops seed round from the popular YC Demo Day as they seek to ramp up the logistics space in Pakistan and create an Amazon-like next-day delivery service for the e-commerce businesses that are expected to grow 16% CAGR, making it a $10.5B opportunity by 2025.
20th June 2022 - Karachi, Pakistan: Rider, Pakistan’s first-ever logistics start-up to be backed by YC, is building modern logistics for online sellers across the country. In doing so, the start-up has attracted the attention of investors and as of today, it is announcing a $3.1M funding in collaboration with YCombinator and new investors including i2i Ventures, Flexport, Soma Capital, and Rebel Fund. The round also included the existing investors such as Global Founders Capital, Fatima Gobi Ventures (FGV), and TPL E-ventures along with the notable angel investor; Arash Ferdowsi (Co-Founder Dropbox). With this seed round, Rider has now raised a total of $5.4M since September 2021.
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Founded in 2019, Rider has been building a network of sorting hubs, urban delivery centers, and a digitized fleet, offering online sellers in Pakistan a next-day ‘Amazon-like’ delivery service. The Rider platform offers route optimization for delivery agents, live tracking and scheduling for buyers, and a highly digitized warehousing function for sellers. Being led by Salman Allana, a former UPS Pakistan executive, the core team of Rider consists of former executives from Alibaba, Delivery Hero, and Jumo.
Since their pre-seed investment round in September 2021, Rider’s monthly revenues have grown by 110% and their customer base has doubled to 650 online sellers. Rider has now successfully completed the delivery of over 3M parcels across 60 cities in Pakistan.
Salman Allana, founder, and CEO of Rider commented: “We launched Rider because we knew the traditional courier companies in Pakistan were not set up to serve the e-commerce market and were failing to capture the online buying trend. The problem is huge, circa $1B GMV is lost annually due to failed and slow deliveries, but the opportunity is even bigger than that. Pakistan is the 5th most populous country in the world with 70% smartphone enablement, yet only 3% of retail sales are currently made online. We are really excited about the market potential and the impact of Rider in supporting business growth across the country.”
Rider has plans to enhance the e-commerce marketplace in Pakistan with solutions and infrastructure beyond logistics. Salman Allana added: “Retail is north of a $150B industry. Yet, it is stuck in bricks and mortar. Through our platform, one mile at a time, we are enabling the industry to transform and get online along with more offerings in the time to come. Moreover, we are opening the industry to more participants and changing the face of it. We are fully behind the mission to enable more than 1 million, primarily female-owned Instagram/Facebook sellers to trade.”
“Pakistan’s payment infrastructure is chasing the growth of e-commerce and logistics capabilities. While over 95% of all e-commerce orders are cash-on-delivery (COD), it creates operational challenges for last mile and retailers. Rider is addressing this piece of the puzzle with our payment wallet through which we can reconcile work quickly and ensure sellers are reimbursed within hours.”
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On joining the investment round Kalsoom Lakhani, GP i2i Ventures said: "We are honored to be on this journey with Rider. As the e-commerce industry in Pakistan grows, so will the need for a next-generation 3PL player that understands the realities of the Pakistani market and knows how to build both aggressively, yet efficiently. We believe in the vision of Salman for Rider."
Meanwhile, the new investor; Jared Heyman, Managing Partner, Rebel Fund commented: “Rider is Rebel Fund’s first investment in Pakistan and we are excited to support their further growth. The company’s founding team and traction to date are impressive, and we believe that Pakistan’s market desperately needs a sophisticated technology-driven delivery service like Rider.”
FGV’s General Partner Ali Mukhtar commented: “There is strong momentum in the e-commerce space in Pakistan, which is largely driven by the shift in consumer behavior with the increase in 3G/4G penetration across the country. With this, there is the immense growth potential for last-mile champions such as Rider who are building the required infrastructure to enable growth in the e-commerce space. We believe in the Company’s tech-first approach and we are once again excited to support Salman and his team at Rider.”
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Willem Van Den Bosch, Investor at SOMA Capital remarked: “We think Rider is uniquely positioned to capitalize on the expansion of e-commerce in Pakistan. Rider's core tech-forward product offering fixes legacy pitfalls that exist in the last-mile fulfillment market today. Rider's B2B2C offering fixes issues with delivery failures, lateness, and broken communication which have hampered the expansion of e-commerce previously. We are extremely supportive of the Rider team's ability to execute and expand deeper into the full logistics product stack and continue to enable e-commerce fulfillment in Pakistan and beyond.”