Dastgyr, a B2B marketplace out of Karachi that connects suppliers to mom-and-pop retailers, on Tuesday announced that it has raised $37 million in Series A funding — the first round of financing for a new business after seed capital — for the biggest investment yet in Pakistan at this stage.

According to a press release, the round was led by VEON Venture — the corporate venture arm of Jazz Pakistan’s parent company — with a contribution of $15m. Other participants in the round were Zinal Growth, DEG, Khwarizmi Ventures, OTF Jasoor Ventures, Cedar Mundi, Reflect Ventures, Century Oak Capital, Hi2 Global, GoingVC, Astir Ventures, K3 Diversity Ventures, and Chandaria Capital, along with the founders of Property Finder, Ayoconnect, Quiqup, and senior management from DoorDash.

The new financing comes less than a year after Dastgyr announced its $3.5m seed round, the press release said.

It claimed that Dastgyr has grown 300 per cent since then, adding over 70,000 retailers across five markets and venturing into new categories such as construction and building materials.

"We’re thrilled to achieve this milestone in the current global economic environment. While we are proud of our growth, we are even prouder of achieving this growth with high capital efficiency. In today’s world, the focus is shifting toward unit economics, burn multiples, and sustainability, but these have been our core focus areas from day one," the press release quoted Dastgyr co-founder Zohaib Ali as saying.

He said that financial inclusion, which is central to the startup’s mission, would uplift and enable Pakistan’s small and medium-sized retail entrepreneurs to potentially unlock up to an additional $10 billion for the GDP.

The press release said that VEON joins Dastgyr at a time when the latter is aiming to expand its Buy Now Pay Later offering and introduce lending products for its sellers as well. It added that Jazz and JazzCash would enable Dastgyr to scale its lending arm across Pakistan.

"As part of VEON's transformation into a digital operator that delivers a growing range of services to our customers, we are investing in leading digital companies like Dastgyr in the countries where we operate. These investments are the building blocks of the digital ecosystem that will enable us to deliver on our strategy.

“Pakistan, with its rapidly growing digital sector, is a key market for VEON. By bringing together Dastgyr’s e-commerce business with Jazz's communications network and JazzCash's mobile payments platform, we will catalyse the growth in digital services in Pakistan. This will be further enhanced by the digital banking services that we have ambitions to provide," the press release quoted VEN Ventures CEO Mohd Khairil Abdullah as saying.

It added that Dastgyr aims to launch 15 new markets in Pakistan, along with its first international market, in 2022.