Bazaar Technologies Downsizes: 600 Employees Let Go

Bazaar Technologies has encountered significant challenges, leading to the shutdown of two newly launched verticals and the layoff of approximately 600 employees.

In a recent turn of events, Bazaar Technologies, a prominent B2B marketplace startup headquartered in Pakistan, has encountered significant challenges, leading to the shutdown of two newly launched verticals and the layoff of approximately 600 employees. This development underscores the ongoing distress within one of Pakistan’s most prominent startups, reflecting broader struggles within the country’s tech ecosystem.

Founded in May 2020, Bazaar Technologies initially gained traction as a distribution business catering to neighborhood convenience stores, serving a market of around 800,000 retailers in Pakistan. The company reached a notable milestone in 2022 with a successful Series-B funding round, raising $70 million, the largest funding round after Airlift’s $85 million raise.

Despite its initial success, Bazaar Technologies faced fierce competition from established players dominating the distribution market in Pakistan. Companies such as Burque Corporation and Abu Dawood Group held substantial influence, moving inventory worth billions of rupees annually and offering enticing incentives to retain retailers. In comparison, Bazaar’s monthly gross merchandise value (GMV) hovered around $4-6 million, significantly lower than its larger competitors.

The challenging market conditions, compounded by economic downturns and funding constraints, have taken a toll on Bazaar Technologies and other startups in the sector. Jugnu, Retailo, and Dastgyr, all heavily funded startups, succumbed to market pressures, shutting down operations or scaling back significantly in recent months.

In response to the turbulent environment, Bazaar Technologies diversified its offerings beyond mom-and-pop stores, venturing into segments such as pharmaceuticals, mobile phones, and industrial raw materials. However, the company faced setbacks with its new verticals, resulting in the discontinuation of its mobile phones and pharma wings due to poor performance.

The recent layoffs primarily affected non-core teams, with approximately 20% of the workforce, including the entire field force in Lahore, being let go. Bazaar Technologies cited market turbulence, including import restrictions, currency fluctuations, and supply chain disruptions, as contributing factors to the layoffs.

Despite the challenges, Bazaar Technologies remains optimistic about its core food and grocery business, as well as its services catering to offices and restaurants. The company emphasized its commitment to serving tens of thousands of mom-and-pop stores across the country, albeit without providing specific details on its operational capacity post-layoffs.

Saad Jangda, CEO of Bazaar Technologies, reassured stakeholders of the company’s financial stability, citing a strong balance sheet and a substantial portion of capital retained from previous funding rounds. However, the company declined to disclose the duration of its remaining runway or its plans for future fundraising efforts.

Jangda expressed confidence in Bazaar’s path to profitability, highlighting ongoing efforts to improve net revenue and operational efficiency. The company’s realignment strategy involves reallocating talents from discontinued verticals to other departments, minimizing layoffs within the core team.

As Bazaar Technologies navigates through turbulent waters, the broader implications for Pakistan’s tech ecosystem remain uncertain. The company’s resilience in the face of adversity, coupled with strategic adjustments and a focus on profitability, will undoubtedly shape its trajectory in the coming months.