PostEx, a Pakistani startup providing financial and logistics services to online merchants, is gearing up to expand into new markets, starting with Saudi Arabia this year, as reported by TechCrunch.
Founder and CEO Muhammad Omer Khan expressed, “We aim to disrupt other markets by filling the existing gap.” This move comes as e-commerce in Pakistan, currently at 1.5% of the total retail market, experienced a 50% growth in the past year, with PostEx likely playing a role in this surge.
One of the core challenges faced by online merchants in Pakistan is sustaining business and achieving growth, especially with 95% of transactions being cash on delivery, which can take up to 10-15 days to settle. This delay results in working capital issues for merchants.
PostEx, established in 2020 by Khan, addresses these challenges by offering merchants upfront payments against cash-on-delivery orders along with a comprehensive logistics service. The startup, having gained regulatory approval as a non-bank financial institution in Pakistan, also introduced a growth capital offering for online merchants. To mitigate risks, PostEx only extends credit to merchants who utilize its logistics service.
Thanks to this approach, PostEx has maintained non-performing loans below 0.03% since its inception.
PostEx’s customer base of 15,000 merchants is mainly focused on upfront payments with logistics, with over 80% opting for this service while the remaining 20% utilize the logistics service exclusively.
Initially self-funded due to capital controls in Pakistan, PostEx has now expanded operations by collaborating with conventional banks to provide loans directly to merchants based on their track record and creditworthiness.
Subsequent to acquiring rival Call Courier in August 2022, PostEx broadened its logistics network to cover over 650 cities, catering to businesses of all sizes within the e-commerce sector.
PostEx achieved profitability in November last year and currently boasts an annual recurring revenue rate of $21 million, with projections to surpass $25 million by the end of this year.
With a recent $7.3 million equity funding round led by Conjunction Capital, PostEx plans to enter new markets beyond Saudi Arabia and the UAE. Talks are underway to secure an additional $15 million funding round to bolster their presence in Saudi Arabia and expand into the UAE.
PostEx also aims to enhance its offerings in Pakistan, scaling its workforce to 9,000 employees by the year-end and introducing digital payment services for online merchants.
The startup’s continued growth and success have attracted investors like Dash Ventures and Sanabil500, along with existing backers VSQ, FJ Labs, and Zayn VC, highlighting the confidence in PostEx’s business model and potential for further expansion.
