Packworks, a B2B startup that targets micro stores in the Philippines, has announced raising $2 million in a seed funding round co-led by private equity firm CVC Capital Partners and end-to-end logistics group Fast Group.
The funding round was also participated by ADB Ventures, Arise, Techstars, and IdeaSpace Foundation.
Packworks will use the fund to develop The Pack: SuperStore App, increase the breadth of offerings, and improve its user journey.
It also plans to build a department that directly engages the sari-sari stores and provide additional services with partners, and build an open platform for financial institutions and brands to connect directly with store owners.
“At Fast, we constantly search for ways to improve our country’s supply chain. The over 1 million sari-sari stores in the Philippines are a critical component of this chain, and we believe that an immense opportunity exists to build a digital layer to connect these stores with customers and suppliers,” Brice Cu, Senior Managing Director and Country Head of Philippines for CVC Capital Partners and Board Member of Fast Group, said.
Packworks aims to become a platform for other institutions that would like to help the base of the pyramid by addressing the sari-sari store challenge by enabling the value chain and empowering all the involved parties within the sari-sari ecosystem.
“We think of ourselves as the railway or expressway infrastructure and not as the gas station or fast food shop operator. We expand partnerships to provide these services to our stores, such as inventory financing, e-payments, and micro-insurance,” Ibba Bernardo, co-founder and Chief Marketing Officer of Packworks, said.
Founded in 2018 with initial five sari-sari store-partners, Packworks worked on its way to having a 150,000 network nationwide and targeting to have 220,000 stores by the end of 2022 and 500,000 by end of 2023.
The company started out as a solution for multinational companies in the Philippines to connect with neighborhood stores in 2018. By 2019, the Packworks rolled out nationwide with only 220 stores with a gross merchandise value (GMV) of $400,000.
After a year, it gathered 27,828 stores with GMV of $30 million, and it reached 130,000 stores with GMV of $139 million in 2021.