Oware Raises $3.3 Million To Solve Pakistan’s Logistics Problems

Fixing Pakistan’s outdated logistics infrastructure will help the country’s businesses grow and expand the economy, says start-up Oware, which is today announcing a $3.3 million seed financing round. The company, founded last June, promises to help businesses increase sales through more flexible warehousing and smarter distribution.

Oware founders Raza Kazmi and Adil Nisar argue that businesses across Pakistan are being held back by antiquated logistics systems. They struggle to secure new warehousing capacity to store inventory, the founders say, find it difficult to monitor their inventories, and face complex distribution problems.

“Our solution to that problem is based on a shared infrastructure that enables businesses to build sales without substantially increasing their costs,” explains Nisar. “The aim is to level the playing field for Pakistani businesses, because it’s currently only the large multinationals that have access to modern systems.”

In that context, Oware’s solutions are essentially three-fold. First, the business has opened 15 warehouses across four cities offering 500,000 square foot of space to rent; businesses can simply sign up to lease the space they need in any of these facilities, rather than having to find warehousing for themselves.

In addition, Oware offers a distribution service, moving businesses’ goods from the warehouse to customers such as retailers and fulfilment centres, in line with their orders. This business-to-business distribution is crucial in a country were competition for last-mile delivery to the consumer has improved performance in recent times, but where previous stages of distribution have been ignored.

The final piece in the jigsaw is modernised logistics technology. Oware is building out dashboards that connect to all the moving parts of supply and distribution so that customers have far greater visibility of their stock levels and operations. The technology can also help reduce costs – for example, by analysing the trade-off between warehousing costs and delivery prices to identify where best to store inventory.

“Local businesses remain trapped in an archaic and opaque environment dealing with antiquated supply chain systems that are no longer fit for purpose and remain slow, limited, and capital intensive,” says Kazmi. “The time to set up operations is too long, there is limited visibility or tracking of orders, and the execution of processes is inefficient in terms of speed and cost, which we are on a mission to solve”.

“To get to its end destination, a product has to move between several warehouses, fulfilment centres and trucks,” adds Nisar. “This complex ballet is managed by multiple businesses without interconnected systems. Our vision is to build a large scale connected world of distribution that enables a faster route to market for our customers.”

Those customers appear to like the idea. In a few months of trading, Oware has already signed up more than 30 businesses attracted to its offer of a warehousing and distribution network that is within same-day delivery reach of 75% of Pakistan’s population. The company aims to get to 90% by the end of the year.

Like many entrepreneurial ideas, Oware was born out of the founders’ own experiences and difficulties. Nisar previously worked at ride-sharing technology company Careem before leaving to set up his own company to source, manufacture and distribute lighting problems; he soon ran into the infrastructure problems Oware now seeks to solve, meeting Kazmi, the group CFO of a large multinational distribution house, as he sought to overcome his challenges. The pair saw an opportunity to launch a business that would do exactly that.

Having proved the concept works, Oware is now keen to scale it up as quickly as possible. Demand isn’t a problem, says Nisar, such is the frustration of many Pakistani businesses, but the company now needs to build out capacity to meet it. That will require more warehousing space, further investment in distribution and an evolution of the technology stack.

To that end, today’s seed fund announcement will prove valuable. Oware’s $3.3 million funding round is backed by US investors including Flexport Fund and Ratio Ventures, as well as global investors including investors Seedstars International Ventures, The Osiris Group, Swiss Founders Fund, Reflect Ventures, +92 Ventures and Walled City Co.

These backers are attracted by the size of the opportunity in Pakistan, where the logistics market is worth around $35 billion a year – but also by the potential in time to transplant the business model into other economies. Many developing economies struggle with similar infrastructure issues – in Asia, but also in the Middle East and Africa.

“Oware brings a huge archaic industry straight into the 21st century world of on-demand flexibility and management visibility and insight,” says Michel Friedman, a partner at Reflect Ventures, one of the investors. “This is a big opportunity for Oware and an important part of the rapid ongoing modernisation of Pakistan’s economy.”