The price of consumer goods has skyrocketed around the world, creating a big 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 seed funding just three months after going live. 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 investors”.
Founded by Haider Raza and Ammar Naveed, DealCart aims to address the low usage of e-commerce among the middle and low income segments of Pakistan, even as more and more people have access to smartphones and the internet.
DealCart allows users to buy in bulk and share deals via WhatsApp and other social media platforms. By participating in group purchases, consumers can unlock lower prices. Customers have the option to join existing groups or create a new one and share a link to their social networks. When this number reaches a threshold (usually around four people) in a 24-hour period, smaller prizes are unlocked.
Prior to the launch of DealCart, Naveed was senior director at ride-sharing app Careem, overseeing operations in the Middle East and Pakistan, while Raza launched and grew mobility startup Swvl in Pakistan and also worked on Careem.
The founders told TechCrunch that their past experience has given them extensive experience in building and scaling startups in Pakistan and the MENA region. As inflation worsened in Pakistan, they said it became clear that their mission was to help people save money where they spend most of their income.
“Despite rising smartphone and internet penetration, e-commerce usage remains low among the middle and lower-middle income segments that make up the majority of the country. As such, the current e-commerce landscape in the country is skewed towards high-priced electronics, fashion and the convenience proposition of fast-paced commerce, which is costly and can be largely afforded by the small upper-income segment of Pakistan,” the founders. said TechCrunch in an email: “Most Pakistanis are price-conscious, and the current e-commerce landscape doesn’t meet their needs.”
DealCart is able to offer lower prices because it sources directly from manufacturers, works with local brands (while helping them reach a larger consumer base), and lowers its cost of customer acquisition thanks to its increase in consumption. These savings allow DealCart to afford efficient warehousing and last-mile delivery compared to other e-commerce and flash commerce platforms.
Items available through DealCart include cooking oil, rice, wheat, pulses and sugar; tea and milk; fruits and vegetables; infant formula and diapers; drinks; and household cleaning products. DealCart currently buys inventory from manufacturers and stores it in their warehouse. Once orders are confirmed by customers, group purchase products are delivered before 11:00 p.m.
Raza said DealCart’s target market already spends more than 50 percent of household income on groceries and daily necessities, and the startup is able to provide financial relief to them through lower prices. .
The app uses gamification, which the founders say “is a core feature of our product.” For example, group purchases are gamified, with users receiving regular updates on how many people are left to complete the group and how much time is left once they join a group. Users also receive credits for referring new users or sharing products and offers on social media. There is also a feature that allows them to spin an online wheel for free products and app credits, as well as sweepstakes that can only be entered if a user crosses a certain number of offers shared on social media.
Other social commerce platforms in Pakistan include BazaarGhar, CelebShop and Gahhak. The founders say DealCart differentiates itself by focusing on consumers who typically spend about 50% to 60% of their income on groceries and save money on those items.
DealCart is currently in the pre-seed stage and closed last month on $1.1 million in annual recurring revenue.
The founders say its new funding will be used to strengthen its technical and product teams, as well as the DealCart brand. “For us, the main focus will be to grow sustainably through growth through technology rather than through aggressive discounting for customers.”