The company will be pivoting towards a tech-platform play to enable commerce and financial inclusion. This decision comes as Jugnu aims to become more capital efficient and work towards profitability with new global macroeconomic realities.
The company will be moving away from its current model of self-managed fulfillment centers, logistics, and inventory. Although Jugnu has been successful in empowering over 100,000 small and medium retailers in recent years, the low margins and high costs associated with dealing with FMCG products in the e-commerce sector have made it challenging for the company to be profitable.
As a result of this shift in business strategy, Jugnu acknowledges that there will be a significant impact on its teams. The company is reaching out personally to organizations to help transition its talented employees to new opportunities where they can continue to contribute their expertise.
Behind the scenes, it has been confirmed by a former Business Development Executive at Jugnu that an investor has pulled out from the company, which is the primary reason for the shutdown. This further emphasizes the challenges faced by e-commerce FMCG companies in achieving profitability.
Jugnu was founded in 2019 by Sharoon Saleem and Yasir Suleman Memon, two former Unilever executives and co-founders of the retail automation tool Salesflo. The company aimed to digitize, empower, and grow small and medium-sized retailers by providing them with better control over their inventory and capital flow.
During its operations, Jugnu raised a total of $25.7 million through three funding rounds, with its latest Series A round in March 2022 securing $22.5 million from MENA-based e-commerce marketplace Sary, Sarmayacar, and Systems Limited. The company had successfully connected with 30,000 retailers in Islamabad, Rawalpindi, and Lahore, and had plans for further expansion into other cities.
Jugnu, a prominent player in Pakistan’s startup ecosystem, is shutting down its core business operations in the B2B e-commerce supply chain. The company will pivot towards a tech-platform play to enable commerce and financial inclusion. Low margins and high costs, combined with the withdrawal of an investor, have prompted this strategic shift. Jugnu is working to support its affected teams during this transition and explore new opportunities for its employees.
