A Pakistani startup that took inspiration from China’s JD.com and India’s Flipkart to build a managed electronics marketplace on Tuesday raised seed funding from several investors, including PayPal founder Peter Thiel.
In the year Launched in March 2020 — two weeks before the COVID-19 pandemic hit the world — Islamabad-based startup PriceOye offers a range of electronic products, including smartphones, TVs and home appliances.
The seed funding round was led by JAM Fund, the venture capital firm of Tinder founder Justin Mateen. The institutional funding round also includes the likes of Binnext, Digi Daiwa, Mantis VC, Hof Capital, Jet.com investor Palm Drive Capital and Atlas Ventures, among others. Angels including TL, Mercury Bank’s Imad Akud and Shop’s Asif Keshodia also participated in the round – along with previous investors Fatima Gobi Ventures, SOSV and Artistic Ventures. It is TL’s first investment in Pakistan.
PriceOye has served 45 million unique users in Pakistan over the past two years, accounting for 37.5 percent of the country’s total internet users, the startup’s co-founder and CEO Adnan Shafi told TechCrunch in an interview.
“We are the second most visited marketing website in the country with over two and a half million monthly active users coming to the platform, using our product recommendation engine to research and then learn about different products.”
After exiting two startups, Adane and his brother Adel Shafi got the idea to launch PriceOye while doing “a lot of island hopping” in Southeast Asia. The duo observed several startups in Indonesia and India, and saw Asian markets playing out the same consumer internet trends — just at a different pace. They theorized that Pakistan would receive similar consumer internet services in the next four to five years.
That is the genesis of PreOye.
The two players decided to go with a managed marketplace model, where only brands and their official representatives are allowed to sell products, to limit the common frauds and errors that plague traditional online marketplaces, Adnan said.
“In a market where trust is one of the biggest factors and where there is a lot of trust gap between the consumer and the brand, we realized that a managed marketplace model could work, which was first started in China with JD.com, then replicated by Flipkart and others in Southeast Asia. A lot of other players,” Adnan said.
PriceOye sees 30% of its total customers as repeat users who visit the platform to buy consumer electronics. The startup claims to sell an average of four smartphones per user per year.
Adnan, which is the largest online platform for selling mobile phones and accessories in Pakistan, says 35% of its total orders come from tier two and tier three cities.
“In a short period of time, PriceOye has grown exponentially and established itself as a leading national company in online consumer electronics,” Mantis VC co-founder and partner Alex Pall said in a prepared statement.
PriceOye is looking to deploy the new funding to expand its 97-member team by hiring new talent. It also plans to bring the platform closer to people in the country by launching offline experience centers—starting with three centers in high-end malls in Islamabad, Karachi and Lahore. More new products and categories are also in the pipeline for the eponymous platform.
Before the final round, PriceOye raised $450,000 in early seed funding from Fatima Gobi Ventures, Artistic Ventures and SOSV.
“It’s always a tough choice for consumers to spend a lot of money on high-priced products with uncertainty about their authenticity. I’m inspired by PrisOye founders Adnan and Adel’s vision of creating transparency and convenience for their customers when shopping for consumer electronics,” said Simon Chan, managing partner at Palm Drive Capital, in a statement.
