Obtaining raw materials is a major problem for Pakistani manufacturers, who must have multiple phone calls with suppliers while waiting for tariffs, say the founders of Zayare. The startup, which runs a platform that connects manufacturers directly to suppliers, announced today that it has raised $2.1 million in pre-seed funding from Tiger Global and Zayn Capital. This is the first time that Tiger Global has made a pre-seed investment in a Pakistani startup. Other investors include +92 Ventures, Alan Rutledge, Jack Rizvi, and current and former Careem employees.
The startup was founded in late 2021 by Taha Iqbal Teli, Hashair Junair Ahmedani and Ahshan Ali Khan, who went to school together. Zaraye also provides manufacturing companies with working capital, in addition to raw materials. It currently serves the textile and construction industries, with over 300 partners and suppliers in around 20 cities.
Teli and Khan worked together at Careem, Swvl and other companies, while Ahmedani’s family worked in conventional manufacturing. “The manufacturing sector in Pakistan has been operating with very marginal innovations for decades, with WhatsApp being the only noticeable change in the evolution of processes. Zaraye intends to change that,” Khan said.
The platform materials include cotton yarn, which CEO Khan told TechCrunch is the largest raw material used to create end-use fabrics in the textile industry. For construction, Zaraye supplies cement, sand, gravel and crushed stone. The company focuses on smaller manufacturers, with annualized revenues ranging between $250,000 and $2 million.
Typically, manufacturers connect with intermediaries or directly with suppliers and expect them to provide pricing. Zaraye, on the other hand, gives manufacturers more autonomy by allowing them to display their needs and wait for quotes from suppliers. For suppliers, this means they can see consolidated demand from Zaraye’s network of buyers.
According to data aggregated by Zaraye from the Pakistan Credit Rating Agency, Pakistan’s industrial manufacturing sector contributes 20% of the country’s economy with $35 billion worth of raw materials annually, materials Raw materials contribute 60-65% of total costs for manufacturers, who face small net margins.