Pakistan online marketplace gets $3.5m from VCs

The start-up says the deal represents the largest disclosed venture capital investment in a Pakistani technology company - a claim that tallies with AVCJ Research data.

Founded in 2004, PakWheels is a platform for trading cars and bikes, sharing automotive reviews and news, and checking vehicle prices. According to a statement, the website has been able to leverage its loyal following to gradually grow and maintain its market share despite incursions by larger international classifieds players such as Naspers and Schibsted.

Muhammad Raza Saeed, co-founder and CEO of PakWheels expects Pakistan's interent user base to reach 100 million by 2019. He added that the new round of funding will be used to improve existing services and build new offerings.

"Consumer internet services and IT-enabled product businesses in Pakistan represent a great investment opportunity for savvy investors who can look past the negative perception about the country in international media," said Khurram Zafar, executive director at the LUMS Center for Entrepreneurship, an advisor on the deal. "This deal is a testament to the increasing confidence of early stage venture investors in Pakistani talent."

Earlier this year, Frontier Digital Ventures - which focuses purely on online classifieds - also acquired a 30% stake in Zameen.com, an online property portal in Pakistan, for an undisclosed sum. The last IT-related deal in Pakistan prior to that was in 2008.

AVCJ Research has a total of 55 private equity deals on record for Pakistan, 14 of which have been early-stage investments and a further 18 have been growth capital transactions. There have been seven IT-related investments in the country to date.

 

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