Lahore-based PostEx that calls itself a fintech and logistics hybrid has a six-figure (USD) pre-seed investment, it told MENAbytes earlier this month, without disclosing the exact size of investment. The investment came from Farhan Abbas Sheikh, an angel investor – and is the first external money raised by the startup.
Founded earlier this year by Omer Khan and Saad Mahmood, PostEx is trying to solve some of the biggest pains associated with cash-on-delivery for online sellers. Most of the courier companies that work with online retailers esp. those with low volumes take weeks to pay them for their cash-on-delivery orders. As these businesses generally are low on cash, the delay from courier companies create a lot of problems for them.
PostEx offers upfront payments for cash-on-delivery orders for a fixed fee. The fee varies depending on the type and volume of the business, its founder and CEO told MENAbytes in a conversation. In addition to providing upfront payments for the COD orders, PostEx also offers ‘free same-day delivery’ using its own fleet in Lahore.
Omer in a statement said, “One of the biggest challenges the ecommerce industry faces is cash-on-delivery due to delayed payments and uncertainty about the cash flows. Lack of access to cash and inefficiencies of last-mile have hampered the growth of small & medium-sized ecommerce companies. By modernizing the pervasive and conventional financing and logistics standards, we are helping our clients to meet all their financing and logistical needs under one roof in an efficient and cost-effective way.”
The startup is currently working with different vendors including Shophive (one of the leading local players) and is in the process of onboarding many more over the next few weeks.
Speaking to MENAbytes, PostEx’s CEO explained that 80 to 90 percent of the online orders in Pakistan are COD, “That is not going to change anytime soon. We cannot change consumer behavior overnight. What we can do, however, is to make it easy for online retailers to work around cash-on-delivery orders and that is exactly what we’re doing at PostEx.”
When asked about how do they deal with returns, Omer Khan said that they always keep 20-25 percent of the total of orders value with themselves and provide the rest of the money as upfront payment to the sellers. The remaining balance is also paid (after deductions of returned orders) to the sellers as soon as the orders are delivered to the customers.
Farhan Abbas, the angel investor who invested in the startup, said, “We are trying to digitalize the payments by providing the much-needed solution of bridging the gap between the sellers and buyers. PostEx brings myriad opportunities as a platform to offer extensive solutions for efficient use of cash flows for the e-commerce sector.”