The price of consumer goods has skyrocketed all over 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 middle and low income segments in Pakistan even as more and more people have access to smartphones and the internet.
DealCart allows users to buy in bulk and share deals through WhatsApp and other social media platforms. By participating in group purchases, consumers are able to 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) within a 24-hour period, lower prizes are unlocked.
Prior to launching DealCart, Naveed was Senior Director of ridesharing app Careem, overseeing operations in the Middle East and Pakistan, while Raza launched and grew mobility startup Swvl in Pakistan, and also worked at Careem.
The founders told TechCrunch that their past experience has given them extensive experience in building and scaling startups across 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 the burgeoning growth of smartphones 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 large e-tickets, fashion and the convenience proposition provided by fast trade which is expensive and can largely be afforded by Pakistan’s small upper income segment,” the founders told TechCrunch in an email: “The majority of 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 directly from manufacturers, works with locally made brands (while helping them reach a larger consumer base) and lowers its cost of customer acquisition thanks to its consumption growth features. These savings allow DealCart to afford efficient warehousing and last-mile delivery compared to other e-commerce and quick-trade platforms.
Items available through DealCart include cooking oil, rice, wheat, pulses, and sugar; tea and milk; fruits and vegetables; infant formula and diapers; beverages; and household cleaning products. Currently, DealCart buys inventory from manufacturers and keeps it in their warehouse. Once the orders have been confirmed by the customers, the products for group purchases are delivered before 11 p.m.
Raza said DealCart’s target market already spends more than 50% of their household income on groceries and daily necessities, and the startup is able to provide them with financial relief through lower prices. .
The app uses gamification, which the founders say “is a core feature of our product.” For example, group buying is gamified, with users receiving regular updates on how many people are left to complete the group and how much time remains once they join a group. Users also get 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, and sweepstakes that can only be joined if a user crosses a certain number of shared offers on the social networks.
Other social commerce platforms in Pakistan include BazaarGhar, CelebShop, and Gahhak. The founders say DealCart differentiates itself by focusing on consumers who typically spend around 50% to 60% of their income on groceries, and saving them money on those items.
DealCart is currently in the pre-seed stage and closed last month at $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 primary focus will be to grow sustainably by growing through technology rather than aggressive customer discounts.”