Pakistan Grocery Startup Raises Funds as It Nears Profitability

Faseeh Mangi, Bloomberg News

A Krave Mart delivery rider uses the company app while waiting to pick up customer orders at one of the company's dark stores in Karachi, Pakistan, on Saturday, Dec. 11, 2021. Pakistan's rapid delivery startup Krave Mart has raised the country's largest early funding to grow its business in the world’s fifth-most populous nation. , Bloomberg

(Bloomberg) -- Delivery startup Krave Mart raised Pakistan’s third-largest funding round for the year, saying the proceeds will help it reach profitability next year.

The Karachi-based company raised the $6.25 million round over the past year, Chief Executive Officer Kassim Shroff said in an interview. Investors participating included Y Combinator, football manager and former player Keisuke Honda, Zayn Capital, JAM Fund, Rebel Fund, Decart Ventures and Conjunction Capital.

Pakistan’s startup economy is experiencing a drought along with global technology companies after a couple of years of record fundraising. Funding dropped by about 90% in Pakistan in the third quarter of 2023, according to data compiled by tech website Data Darbar.

Krave Mart delivers thousands of orders a day, competing with Delivery Hero SE’s FoodPanda as online services gain steam in Pakistan. Airlift Technologies Pvt., which raised Pakistan’s largest round of $85 million only to go bust afterward, also operated in the same sector.

Shroff said Krave Mart has launched more than 150 private label products from bread to handwash to boost its profit margins and they contribute close to 30% of orders. The company’s earnings before some costs as a percentage of sales are topping those enjoyed by other Indian grocery startups with unicorn valuations, he said.

“From day one it was important for us to start a business that makes money, has real margins, and most importantly makes sure our bottom line is becoming green,” said Shroff.

(Updates with details of products in fifth paragraph, comment in sixth.)