Pakistani financial and logistics startup PostEx is poised to enter new markets, beginning with Saudi Arabia, as part of its regional expansion strategy. Founded in 2020 by Muhammad Omer Khan, PostEx addresses critical challenges faced by online merchants, particularly in managing cash flow due to the prevalence of cash on delivery (COD) transactions, which dominate 95% of the market.
Despite the e-commerce sector in Pakistan making up only 1.5% of the total retail market, it has experienced a 50% growth over the past year, with PostEx playing a pivotal role in this surge. The startup offers innovative solutions by providing merchants with upfront payments against COD orders and robust logistics support. This model has successfully kept non-performing loans at a remarkably low rate of below 0.03%.
With a network of over 15,000 active merchants, 80% of whom utilize both financial and logistical services from PostEx, the company has solidified its position in the market. After acquiring Call Courier in 2022, PostEx expanded its reach to over 650 cities across Pakistan, significantly enhancing its logistics capabilities.
Recently turning profitable with an annual recurring revenue rate of $21 million and aiming for $25 million by year-end, PostEx has successfully processed 4 million monthly transactions. The startup’s growth is supported by a recent $7.3 million equity funding round led by Dubai-based Conjunction Capital and is further bolstered by discussions to raise an additional $15 million for its Saudi expansion.
PostEx plans to launch operations in Saudi Arabia within the next three months, following a pilot program with local merchants and applying for a financing license with the Saudi Central Bank. Additionally, the company is exploring opportunities in the UAE, where it already possesses a financing license, with plans to launch after solidifying its presence in Saudi Arabia.
The expansion includes scaling its Pakistani operations, with plans to increase its workforce from 6,500 to 9,000 by year-end. PostEx is also innovating with a digital payments service to facilitate merchant transactions and an integrated expense management system.
Investors in the latest funding round include Dash Ventures, Sanabil 500, and existing partners VSQ, FJ Labs, and Zayn VC, adding to the $8.6 million previously raised by PostEx. This strategic expansion marks a significant step in PostEx’s journey to becoming a key player in the Middle East’s burgeoning e-commerce and fintech sectors.