The Rise of PostEx: Disrupting E-commerce in Pakistan and Beyond
A New Era for Pakistani Retailers
Table of Contents
- A New Era for Pakistani Retailers
- Addressing the Challenges of E-commerce Growth
- PostEx: A Revolutionary Solution
- A Winning Formula
- Looking Ahead: A Future of Growth and Innovation
- From Humble Beginnings to National Reach
- A Logistics Powerhouse: Expanding Market Dominance
- Financial Success: Profitability and Growth
- Expanding Horizons: New Markets and Funding
- Deepening Roots: Growth in Pakistan
- Innovation: Digital Payments and Expense Management
Pakistani startup PostEx, a leading provider of financial and logistical solutions to online retailers, is poised to make waves in new markets. The company’s ambitious expansion plans include a significant foray into Saudi Arabia this year, marking a strategic move to disrupt the e-commerce landscape on a global scale.
Addressing the Challenges of E-commerce Growth
E-commerce in Pakistan is experiencing rapid growth, currently accounting for approximately 1.5% of its total retail market. This figure has surged by an impressive 50% in the past year alone. PostEx plays a crucial role in this burgeoning sector by tackling key challenges faced by online retailers.
One major hurdle is the prevalence of cash-on-delivery transactions, which account for 95% of all e-commerce sales in Pakistan. Traditional courier services often take 10 to 15 days to settle these transactions from dispatch to delivery, leading to significant working capital issues for online businesses.
PostEx: A Revolutionary Solution
Founded in 2020 by Muhammad Omer Khan, PostEx offers a unique solution to these challenges. The company provides retailers with upfront payments against cash-on-delivery orders and integrates a robust logistics service. By becoming a regulated non-bank financial institution in Pakistan, PostEx has also introduced a growth capital offering specifically designed for online retailers.
To mitigate risk, PostEx only extends credit to retailers who utilize its logistics services. This integrated approach has proven highly effective, resulting in a remarkably low non-performing loan rate of under 0.03% since the company’s inception.
A Winning Formula
“Because we control the flow of funds, it means that if we’re giving the credit, we’re doing the deliveries on our own, and then we’re collecting the money directly from the customer,” explains Khan.
This integrated model has resonated strongly with retailers. Of PostEx’s active base of 15,000 merchants, over 80% have opted for both upfront payments and logistics services, while the remaining 20% utilize only the logistics service.
Looking Ahead: A Future of Growth and Innovation
PostEx’s expansion into Saudi Arabia signifies a bold step towards becoming a global leader in e-commerce solutions. The company’s innovative approach to financing and logistics is poised to revolutionize the industry, empowering online retailers and driving further growth in the sector.
PostEx: Scaling Pakistan’s E-Commerce Landscape with Logistics and Financing
From Humble Beginnings to National Reach
PostEx, a Pakistani e-commerce enabler, has rapidly ascended from its initial bootstrapped phase to become a nationwide force. Initially relying on personal equity due to Pakistan’s stringent capital controls, PostEx faced challenges securing traditional debt financing. However, as the startup gained traction, amassing a proven track record of retailers and successful credit repayments, it began partnering with conventional banks to offer direct loans to retailers through their balance sheets. This strategic shift allowed PostEx to expand its reach and provide crucial financial support to businesses across Pakistan.
A Logistics Powerhouse: Expanding Market Dominance
In a pivotal move that solidified its position as Pakistan’s leading e-commerce service provider, PostEx acquired rival Call Courier in August 2022. This strategic acquisition propelled the startup from serving three key markets to over 650 cities nationwide. The expanded logistics network enabled PostEx to onboard smaller businesses and enterprise clients alongside large retailers, catering to a diverse range of e-commerce companies of all sizes.
This logistics expansion has been instrumental in PostEx’s success. By providing reliable and efficient delivery services across Pakistan, the company has become an indispensable partner for businesses looking to thrive in the competitive e-commerce landscape.
Financial Success: Profitability and Growth
PostEx’s strategic decisions have translated into impressive financial results. Just over a year after acquiring Call Courier, the startup achieved profitability in November 2022. The company has also recently surpassed an annual recurring revenue (ARR) of $21 million, processing 4 million monthly transactions. Projections indicate that PostEx is on track to exceed $25 million in ARR by the end of the year.
“There isn’t a cost of acquisition, except there’s only the cost of debt or cost of capital,” said Khan. “So, we’re focusing on healthier margins for profitability…we’re growing 10–15% month-on-month.”
Expanding Horizons: New Markets and Funding
With a strong foundation in Pakistan, PostEx is now setting its sights on international expansion. The startup has secured $7.3 million in an all-equity funding round led by Dubai-headquartered Conjunction Capital to fuel this growth. The funds will be used to enter new markets, starting with Saudi Arabia within the next three months.
PostEx plans to double down on its presence in Saudi Arabia by raising another $15 million round, with discussions already underway with potential investors. The company is also testing its platform in the UAE and holds a financing license there. A launch in the UAE is planned after successfully establishing a foothold in Saudi Arabia.
Deepening Roots: Growth in Pakistan
While expanding internationally, PostEx remains committed to strengthening its position in Pakistan. The company aims to increase its workforce from 6,500 across 600 cities to 9,000 by the end of the year. PostEx will focus on investing in specific cities with higher growth potential.
Innovation: Digital Payments and Expense Management
Beyond logistics and financing, PostEx is continuously innovating to provide comprehensive solutions for online retailers. The company is piloting a digital payment service in Pakistan, enabling seamless transactions at the doorstep or checkout page. PostEx also offers an expense management system that helps retailers manage salaries, vendor payments, and bills through a single platform.
This latest funding round saw participation from Sprint Ventures, Sanabil500, alongside existing investors VSQ, FJ Labs, and Zayn VC. Prior to this round, PostEx had raised $8.6 million in funding.
