Karachi-based business-to-business raw materials marketplace, Zaraye, has raised $2.1 million in a pre-seed round led by Tiger Global and Zayn Capital, according to a statement issued by the company.

Other investors included +92 Ventures, Jack Rizvi, and current and former Careem employees.

It was Tiger Global’s first pre-seed investment in Pakistan, the statement said.

It added that the company, which was founded in late 2021, "helps manufacturing businesses procure raw materials and finance working capital".

The statement said that the "platform helps buyers of raw materials connect with a multitude of suppliers who furnish their quotes in real-time making the process faster and hassle free".

"It is currently serving clients across textile and construction industries, with over 300 partners and suppliers spread out in over 20 cities."

The founders

Zaraye was founded by Institute of Business Administration graduates Taha Iqbal Teli, Hashair Junaid Ahmedani and Ahsan Ali Khan.

Teli and Khan have been part of the tech ecosystem for the past 5 years with experience at giants like Careem and Swvl, the company's statement said.

Khan led Swvl’s travel category for Pakistan in his last stint, while Teli led the TaaS product for Karachi before launching the Daewoo Adda, a logistics product for transportation’s leading player Daewoo.

Meanwhile, Ahmedani, after completing his post-graduate degree at the University of Bath — where he studied with Teli — returned to Pakistan to join his family business in Karachi. Ahmedani soon found his passion in the hospitality industry, introducing Czech and Levantian cuisines to Pakistan with two successful ventures while building a fast moving consumer goods brand for imported coffee from Latin Amercia.

The company

According to the statement, in Pakistan’s industrial manufacturing sector, raw materials contribute 60-65pc of the total costs for manufacturers.

"In conditions where net margins are thin, finding efficiency in costs becomes critical for these businesses to win orders and sustain against competition locally and globally," the statement said, adding that small and medium enterprises had also always found acquiring financing a huge battle for their businesses from financial institutions, and were "forced to turn to informal markets with ~2.5x premiums."

Addressing this issue, the statement quoted Khan as saying: "We aim to strengthen the backbone of the country’s economy by helping entrepreneurs find avenues to optimise and scale."

"Zaraye will help our partners to compete locally and globally as they find more savings in time and money to create the best products. With the confidence of amazing investors in Zaraye, we are geared to supercharge our mission to reach millions of users,” he said.

The company's statement further highlighted that traditionally, a manufacturer would connect with a handful of intermediaries or directly with the suppliers with a tedious process of going through multiple phone calls, and wait for them to furnish rates.

"This process is longer, tedious and brings very limited options for the buyers to make a decision," the statement said, adding that with Zaraye, buyers of raw materials could simply post their requirements for the required product and the relevant suppliers could furnish quotes in real time, "making the information for buying decisions vast and quick".

"At the same time, the suppliers can access consolidated demand volumes with the vast network of buyers on Zaraye’s platform."

In this connection, Ahmedani said: “Small and medium business owners have been trapped in a cycle of high competition and lack of financing options. Zaraye aims to help these businesses scale as they find the efficiencies in procurement and financing options to make better decisions for their businesses.”