The price of consumer goods has been soaring all around the world, creating a major budgeting 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 their 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 middle and lower-income segments in Pakistan, even though more and more people have access to smartphones and the internet.
DealCart allows users to buy in groups and share deals through WhatsApp and other social media platforms. By participating in group buys, consumers are able to unlock lower prices. Customers have the option of either joining existing groups or creating a new one and sharing a link to their social media. When that number hits a threshold (usually about four people) within a 24-hour period, lower prices are unlocked.
Before launching DealCart, Naveed was a senior director at ride-hailing app Careem, overseeing operations across 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 past experience gave them extensive experience building and scaling startups across Pakistan and the MENA region. As inflation got worse in Pakistan, they said it became clear that helping people save money on where they spend most of their income was their mission.
“Despite the burgeoning growth of smartphones and internet penetration, e-commerce usage remains low among the middle and lower middle-income segments that constitute the majority of the country. As such, the current e-commerce landscape in the country is skewed toward large ticket electronics, fashion and the convenience proposition provided by quick commerce which is expensive and can largely be afforded by the smaller upper income segment of Pakistan,” the founders told TechCrunch in an email. “The majority of Pakistanis are price-conscious and the current e-commerce landscape does not cater to 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 lowering its customer acquisition cost through its consumer growth features. These savings allow DealCart to afford efficient warehousing and last-mile delivery compared to other e-commerce and quick commerce platforms.
Items available through DealCart include cooking oil, rice, wheat, pulses and sugar; tea and milk; fruit and vegetables; baby formula and diapers; beverages; and household care products. Currently, DealCart purchases inventory from manufacturers and holds it at their warehouse. Once orders are confirmed from customers, products for group buys are delivered by 11 p.m.
Raza said DealCart’s target market already spends upwards of 50% of their household income on groceries and essentials, and the startup is able to give them 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 receiving regular updates on how many people are left for group completion and time remaining once they join a group. Users also get credits for referring new users, or sharing products and deals on social media. There is also a feature that allows them to spin an online wheel for free products and app credits, and lucky draws that can only be joined if a user crosses a certain amount of deals shared on social media.
Other social commerce platforms in Pakistan include BazaarGhar, CelebShop and Gahhak. The founders say DealCart differentiates by focusing on consumers who typically spend about 50% to 60% of their income on groceries, and enabling them to save money on those items.
DealCart is currently at pre-seed stage and closed last month at $1.1 million annual recurring revenue.
The founders say its new funding will be used to build its tech and product teams, as well as DealCart’s brand. “For us the core focus will be to grow in a sustainable manner whereby we grow through tech rather than aggressive discounting for the customers.”