KARACHI: Systems Ltd said on Friday its associate company Jugnu, a business-to-business e-commerce platform, has raised $22.5 million in Series A, which is the first round of financing undertaken for a new business after seed capital.

The startup, which helps kiryana stores connect directly with large suppliers and manufacturers, raised the funding after entering a strategic alliance with Sary, a Middle East and North Africa–based online commerce marketplace.

“Earlier, Systems Ltd made an equity investment in Retailistan, the parent company of Jugnu, acquiring a 20 per cent stake in the business, joining hands with the now-progressing retail accelerator,” the company said in a stock filing.

The country’s tech sector has seen a flurry of activity in recent years, with startups raising a total of $563.5m in 255 deals from 2015 to date. They raised $350m via 83 deals in 2021 alone, according to the recently released Pakistan Startup Ecosystem Report 2021.

The report said Pakistani startups typically raise between $1m and $11m at the Series A stage, which means the $22.5m financing raised by Jugnu is substantially high given the local e-commerce landscape.

Jugnu has already connected more than 30,000 kiryana stores and small and medium enterprises (SMEs) directly with manufacturers through its app to address digitisation challenges across the e-commerce industry. “With Systems Ltd as a catalyst for growth, Jugnu can upscale the digital retail landscap on all fronts,” it added.

The strategic investment in the Series A round was led by Sary and had participation from Sarmayacar and Systems Ltd. “[It] will enable Jugnu to... strengthen the retail supply chain, lighting up the livelihoods of one million-plus SMEs that constitute a sizable chunk of Pakistan’s economy,” it said.

Pakistan has over 1m kiryana stores that lack access to convenient inventory procurement. Over two-thirds of the retail stores are never serviced directly by any organised distribution channel.

Published in Dawn, March 26th, 2022