A Pakistani startup, which has taken inspiration from China's JD.com and India's Flipkart to build a managed marketplace of electronics products, said on Tuesday it has raised seed funding from scores of investors, including PayPal founder Peter Thiel.
Launched in March 2020 — just two weeks before the COVID-19 pandemic ravaged the world — the Islamabad-based startup PriceOye offers a range of electronics products, including smartphones, TVs and home appliances.
Its seed funding round was led by JAM Fund, a venture capital firm by Tinder founder Justin Mateen. The institutional funding round also included participation of Beenext, DG Daiwa, Mantis VC, HOF Capital, Jet.com investor Palm Drive Capital and Atlas Ventures, among others. Angels including Thiel, Immad Akhund of Mercury Bank and Asif Keshodia of Souq also participated in the round — alongside previous investors Fatima Gobi Ventures, SOSV and Artistic Ventures. This is Thiel's maiden investment in Pakistan.
PriceOye has served 45 million unique users in Pakistan in the last two years, covering 37.5% of the country's total internet user base, Adnan Shaffi, co-founder and CEO of the startup, told TechCrunch in an interview.
"We are the second most visited shopping website in the entire country, with over two and a half million monthly active users coming on the platform, doing research using our product recommendation engine, and then getting to know about different products," he said.
After exiting two startups, Adan and his brother Adeel Shaffi got the idea of launching 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 the Asian markets were seeing similar consumer internet trends play out — just at a different pace. They built a thesis that Pakistan will see similar adoption of consumer internet services in the next four to five years.
That's the genesis of PriceOye.
The duo decided to go with the managed marketplace model, where only brands and their official representatives are allowed to sell products, to limit the instances of common frauds and errors that have proven to be painful to traditional online marketplaces, Adnan said.
"We realized that in a market, where trust is one of the biggest factors, and there's a lot of trust deficit between the consumer and the brand, the only way a marketplace can work is the managed marketplace model, which originally started out of China from JD.com, then replicated by Flipkart, and a lot of other players in Southeast Asia," Adnan said.
PriceOye sees 30% repeat users of its entire customer base who visit the platform regularly to purchase consumer electronics goods. The startup also claims to sell four smartphones to a single user per year on an average.
It is the largest online platform for selling mobile phones and accessories in Pakistan, claimed Adnan, adding that 35% of its overall orders come from tier-two and tier-three cities across the country.
"Within a short period of time, PriceOye has grown exponentially and has cemented its position as the leading national company in online consumer electronics. We are excited to join PriceOye in its mission towards changing the way people shop in Pakistan," said Mantis VC founder and partner Alex Pall, in a prepared statement.
PriceOye is looking to deploy the fresh funding to expand its 97-member team by hiring new talent. It's also planning to bring its platform closer to people in the country by starting offline experience centers — beginning with three centers in high-end shopping malls across Islamabad, Karachi and Lahore. More new products and categories are also in the pipeline for the eponymous platform.
Before the latest round, PriceOye had raised $450,000 in pre-seed funding from Fatima Gobi Ventures, Artistic Ventures and SOSV.
"It's always a difficult choice for consumers to spend big amounts of money on high-value products while being unsure about their authenticity. I was inspired by the vision of PriceOye founders Adnan and Adeel of creating transparency and bringing convenience to customers when it comes to shopping for consumer electronics," said Seamon Chan, managing partner of Palm Drive Capital, in a statement.