The price of consumer goods has been rising across the world, creating a major budget headache for many people. Social commerce startup DealCart wants to make life easier for shoppers, at least in Pakistan. The company announced today that it has raised $4.5 million in pre-seed funding just three months after its operational launch. The round was led by Shorooq Partners with participation from Fatima Gobi Ventures, Vibe Capital, 500 Global, i2i Ventures, Julian Shapiro, Rally Cap Ventures, Alex Lazarow and several “strategic angel investors”.
Founded by Haider Raza and Ammar Naveed, DealCart wants to address the low usage of e-commerce among the middle and low-income segments in Pakistan, even though more and more people have access to smartphones and the internet.
DealCart allows users to shop in groups and share offers via WhatsApp and other social media platforms. By participating in group shopping, consumers can unlock lower prices. Customers have the option to join existing groups or create a new one and share a link on their social media. When that number reaches a threshold (usually around four people) within a 24-hour period, the lower prices are unlocked.
Prior to launching DealCart, Naveed was Senior Director of the ride-hailing app Careem, overseeing operations in the Middle East and Pakistan, while Raza launched and scaled mobility startup Swvl in Pakistan and also worked at Careem.
The founders told TechCrunch that their previous experience has given them extensive experience building and scaling startups in Pakistan and the MENA region. As inflation worsened in Pakistan, they said it became clear that helping people save money where they spend most of their income was their mission.
“Despite the growing growth of smartphones and internet penetration, e-commerce use remains low among the middle and low-income segments that make up most of the country. As such, the current e-commerce landscape in the country is skewed towards large electronics, fashion and the convenience proposition provided by fast commerce, which is expensive and can be largely paid for by Pakistan’s lower upper-income segment,” said the founders to TechCrunch. in an email. “Most Pakistanis are price conscious and the current e-commerce landscape does not meet their needs.”
DealCart is able to offer lower prices because it sources products directly from manufacturers, works with locally manufactured brands (while helping them reach a larger consumer base), and lowers the cost of customer acquisition through its consumer growth capabilities. . These savings allow DealCart to offer efficient storage and last mile delivery compared to other ecommerce and fast commerce platforms.
Items available on DealCart include cooking oil, rice, wheat, pulses and sugar; tea and milk; fruits and vegetables; infant formula and diapers; drinks; and home care products. Currently, DealCart buys stock from manufacturers and holds it in their warehouse. After the orders are confirmed by the customers, the products for group purchases are delivered until 23:00.
Raza said DealCart’s target market already spends more than 50% of their household income on groceries and essentials, and the startup is able to provide financial relief through lower prices.
The app uses gamification, which the founders say “is an essential feature of our product”. For example, group buying is gamified, with users getting regular updates on how many people are left to complete the group and the time left after they join a group. Users also receive credit for referring new users or sharing products and offers on social media. There is also a feature that allows them to spin an online roulette wheel for free products and app credits, and sweepstakes that can only be added if a user crosses over a certain amount of offers shared on social media.
Other social commerce platforms in Pakistan include BazaarGhar, CelebShop and Gahhak. The founders say DealCart sets itself apart by focusing on consumers who typically spend around 50% to 60% of their income on groceries and allowing them to save money on those items.
DealCart is currently in the pre-seed stage and closed last month with annual recurring revenue of $1.1 million.
The founders say their new funding will be used to build their technology and product teams, as well as the DealCart brand. “For us, the main focus will be on growing sustainably, whereby we grow through technology rather than aggressive discounts for customers.”