Pakistani fintech PostEx has taken over logistics service provider Call courier, creating what it describes as the largest e-commerce service provider in the country. PostEx will now serve 1.3 million users with more than 8,000 merchants in 500 cities in Pakistan, and is on track to have a loan book of more than $12 million.
The acquisition will make Call Courier a wholly owned subsidiary under the group name. PostEx offers services such as prepayment in a country where more than 90% of e-commerce payments are still made in cash, and revenue-based financing for e-commerce merchants and SMEs.
PostEx co-founder and CEO Omer Khan told ukbusinessupdates.com that about 100 million adults in Pakistan do not have a bank account, according to the World Bank. As a result, companies have limited access to working capital and a lack of adequate cash flow. On the other hand, consumers are wary of digital transactions, and even many who have bank accounts still prefer to pay cash on delivery for items ordered online.
But COD is problematic for ecommerce businesses because they have a higher rejection rate at the door. In addition, it often takes two to three weeks for money from cash on delivery purchases to be deposited into a business bank account, compared to a few days for digital payments.
As a result, PostEx’s founding team decided there was potential to build a reliable logistics provider, plus upfront cash. Prepayments ensure that online merchants no longer have to go through long payment cycles and have better cash flow.
“We’re making it easier for businesses to reach more customers, take care of their delivery needs, and provide them with up-front liquidity,” Khan said. “This is essential for smaller businesses that need every cent to support themselves.”
As for the competition, Khan says PostEx’s novelty is the hybrid of fintech and logistics. It has raised $8.6 million to date and its backers include Zayn Capital, Global Founder Capital, MSA Capital, RTP, FJ Labs and Shorooq.
In a statement, Senator Afnan Ullah Khan, a member of the Prime Minister’s IT Task Force committee, said: “This acquisition demonstrates the importance of close cooperation between fintech and logistics and emphasizes the importance of access to capital. Through this acquisition, PostEx is the largest e-commerce service provider on the market, showing the potential of startups for challenging incumbents. It’s refreshing to see new solutions to old problems.”
