Rider is on a mission to provide online shoppers in Pakistan with “Amazon-like” next-day deliveries. The Karachi-based company announced it has raised $3.1 million in new funding from Y Combinatior, along with new investors i2i, Flexport, Soma Capital and Rebel Fund. Returning investors included GFC, Fatima Gobi and TPL E-ventures, along with Dropbox co-founder Arash Ferdowsi. This brings RIder’s total raised to $5.4 million since September 2021.
Founded in 2019 by former UPS Pakistan executive Salman Allana, Rider is building a network of sorting hubs, delivery centers and a digitized fleet. The platform enables sellers to offer next-day delivery with route optimization, live tracking and scheduling for buyers. The company claims that since their pre-seed investment round in September 2021, monthly revenues have grown 110% and they have doubled their customer base to 650 online sellers. So far, Rider has delivered 3 million parcels across 60 cities in Pakistan. It currently runs a network of 16 hubs that cover 60 cities across Pakistan, which Allana said accounts for about 60% of e-commerce demand in the country.
Allana told that growing up in Karachi and spending his early career in sub-Saharan Africa meant he was used to poor supply chains and logistics services. “If you ordered something online, you accepted the huge risk it might never show up,” he said. When he moved to London to study for his MBA, he became “obsessed” with Amazon delivery. “How could an order I placed at midnight be at my doorstep the next morning? I believed there was a clear and large opportunity to bring this service quality to online sellers in Pakistan and eradicate ‘parcel anxiety’ for all online buyers in Pakistan—including myself.”
After earning his MBA, Allana started working for UPS Pakistan as head of strategy and business development. He saw for himself the challenges logistics incumbents face, including lost orders, buyers who are reluctant to order online again and, for online sellers, headaches like manual cash-on-delivery, reconciliation and slow payback, which created working capital challenges, especially for Pakistan’s one million SMEs that rely on Instagram and Facebook to reach buyers.
“I learnt that the traditional delivery payers were not set up or equipped to service the online retail trend, and that change from the inside would be slow and costly,” Allana said. “The COVID pandemic saw a huge and irreversible shift to online shopping across Pakistan. Only a built-for-purpose, dynamic, growth-focused startup could capture this opportunity on time.”
Logistics is a notoriously cash-burning sector. Allana said that the network of delivery centers Rider is building isn’t what you would usually imagine. Instead they include mobile warehouses (or pre-sorted vans), empty spaces in the parking lot of malls and petrol stations. Moving forward, Rider would also like to have delivery centers in kiranas, or convenience stores. This means delivery centers are flexible enough to move as high volume e-commerce zones change.
“We’re fundamentally building for ‘urban logistics,’ so we don’t have requirements for large sorting centers and spaces,” he said. “Our network consists of numerous small delivery centers which are purposely placed to cover high-volume e-commerce zones, and which ultimately are flexible to move as these zones change.”
Rider’s new funding will be used on its in-house tech, including e-commerce enablement tools like plug-ins and built-in wallets to help SMEs, which Allana said are mostly owned by women, grow their businesses.
“Our ambition from day one—we want to be the country’s number end-to-end e-commerce logistics solution provider,” Allana said. “But we see logistics as a series of building blocks, each of which we need to get right, operationally and financially, before we can build the next. Today, Rider is doing last-mile delivery to the customers’ doorstep. We’ve proven our last mile solutions work, we’ve proven they work at scale and we now need to prove they work sustainably before we enter other verticals.” He added Rider already has an eye on its next phase, and piloted its B2B movement, or overland trucking, in January.
In a prepared statement, i2i general partner Kalsoom Lakhani said, “As the e-commerce industry in Pakistan grows, so will the need for a next generation 3PL player that understands the Pakistani market realities and knows how to build both aggressively but also efficiently. We believe that this player is Rider and have so much conviction in Salman and his vision.