Snack delivery startup, Munchies, announced on Wednesday that it has raised $2.5 million in Pakistan’s third-largest pre-seed funding round, according to Business Recorder.
The round was led by Unilever Pakistan and VentureDive and was second only to the funding rounds by fintech startup, TAG Innovation, and freight transport platform, Truck It In, in which they secured $5.5 million and $3 million, respectively.
Karachi-based Munchies is a snack delivery service that started up just a couple of months ago. Unilever Pakistan and VentureDive ran a year-long pilot to test the service, which was “successful enough to warrant a full-scale investment as well as life as its own legal entity,” said a company statement.
CEO and Co-founder, Saad Fazil, calls the service a “one-stop solution for impulse buying” through which customers can buy their favorite snacks and food items with one click of a button.
Fazil, who was the managing director and co-founder at VentureDive, said in a statement, “We are growing at a tremendous pace — and hitting an easy 40 percent month-on-month increase in daily orders and even higher for gross merchandise value.”
However, other delivery services like Airlift are also growing rapidly and may pose as tough competition.
“Competition is heating up,” Fazil told Business Recorder. “The customer acquisition cost is going to go up for all companies, not just us.”
“But we’re focused on being hyper-local, and getting retailers on board,” he added. “We’re also adding our own dark stores — this hybrid approach should position us well.”
Munchies intends to use its new financing to develop dark stores, which are retail distribution centers that exclusively target online shopping, as well as warehouses. They plan to focus on serving Karachi’s customer base for now.
Pakistan has witnessed a surge in startup funding in the past few months. In the first nine months of 2021, Pakistani startups have raised record-high funding of over $305 million, according to data compiled by investment firm Alpha Beta Core.
Most recently, the software integration platform, Integry, raised $3 million in early-stage funding, and fintech, PostEx, secured $1.5 million in seed funding.