Why Retailo is betting on Maksud bhai instead of dark stores

From Hasan Abdal to a $10 million seed round

The episode opens with Muzamil introducing his guest as a particularly accomplished one — Naukhez Sarwar, a co-founder of Retailo, which had recently closed a combined pre-seed and seed round of roughly ten million dollars. Before the conversation moves to the company, Muzamil asks a question he asks of most founders: where did you come from, and how did you get here.

Naukhez’s answer is unusually specific. He spent five years at Cadet College Hasan Abdal, the boarding school near Islamabad, on the family’s expectation that he would join the army. His father was a banker, his mother a school teacher, and his parents had three sons in three boarding schools at once. “At some point my dad’s salary and Hasan Abdal’s fees used to be on the same day,” he says. The first fee they paid was equivalent to four months of his father’s salary. Savings were exhausted, loans were taken, small properties were sold. Both of his younger brothers eventually did join the army. He was the first son — and the one who broke the plan.

The break came through the NOP — the National Outreach Program at LUMS. Naukhez applied because it offered a day off in Islamabad. The one-month training programme that followed was the first university he had ever seen. “It was mind blowing,” he says. “These conversations we never had.” His English at the time was poor enough that he could not read a full sentence on his own. He memorised a Baron’s vocabulary book cover to cover. He got in, picked a dual major in economics and political science, and graduated six months early in 2012 — because most of his credits were paid for and because, he says plainly, he thought everyone in his class was more talented than him and he did not want to compete with them on the way out.

The early stops: Shopistan, Careem, Taza Daily

Recruitment cycles were thin when he graduated. He joined a tiny LUMS-founded startup called Bagget — “we were trying to create a B2C marketplace for Pakistan, Amazon of Pakistan; but in essence we were selling T-shirts.” That lasted a couple of months. From there he moved to Shopistan, founded by an ex-Amazon, ex-eBay operator he immediately clicked with — and who, years later, became the first investor in two of Naukhez’s companies. At Shopistan he watched the team pivot from trying to build an Amazon for Pakistan to building the picks-and-shovels for retailers who wanted to go online: warehousing, photo studios, omnichannel software that connected physical inventory to virtual stores so that the nearest customer order could be fulfilled from the nearest physical shop. At one point, he says, Shopistan was processing roughly eight percent of Pakistan’s e-commerce volume.

He then left to start Taza Daily — a subscription grocery business built around milk. “I was mimicking that gwala,” he says of the daily milkman. At peak he had 250 subscribers and was selling three to four hundred litres of cow’s milk a day, plus occasional fruits and vegetables. The model broke on the cold chain. Fresh milk that is not maintained at four degrees goes bad in twelve hours; the existing supply chain stretched that to twenty-four using ice and preservatives. To scale past four hundred litres he would have needed Nestlé-grade collection centres and cold-storage vehicles, and no one in 2016 understood why a Lahore startup needed that infrastructure. The customer signal was also against him — Lahore is a buffalo-milk city, and his customers complained that cow’s milk did not give their tea the right colour.

What Naukhez learned running pricing at Careem

Later in the discussion, Muzamil pulls him through the Careem years in detail. Naukhez joined as a “vendor manager,” realised after a week that the role was managing rent-a-car middlemen — the opposite of the decentralised, captain-direct platform he had joined for — and refused to do it. He moved through captain support and performance in Lahore, then to Dubai as a pricing analyst, and within months was heading Careem’s pricing function across multiple markets.

His description of ride-hailing pricing is one of the cleanest passages in the conversation. There is a static layer — base fare, per kilometre, waiting time. There is a dynamic layer — the peak factor and its relationship to the demand-supply imbalance. And there is a city-specific equilibrium: ten thousand cars in a city is a different problem from five hundred.

Muzamil presses him on the persistent public claim that Careem and Foodpanda exploit their captains. Naukhez’s answer is unsentimental. “I don’t think any of these companies are profitable,” he says. “Some might be break-even now. They’re still burning cash.” But the captain resentment, in his reading, is not really about today’s economics. It is anchored to the launch era, when Careem and Uber were paying three lakhs a month against twelve-to-fifteen-lakh cars, telling drivers their car would be paid off in six months. “They have those good memories,” he says, “and not just memories — every captain knows every little detail about it, even ones who never lived through it.” Layer on top of that the unsustainable category of captain — the rent-a-car company that bought a car, hired a driver, and expected fifty to sixty thousand rupees of monthly profit after the installment and the salary — and the picture clarifies. That model could never have worked. The ride-hailing platform that works is one where the captain already owned the car and was already going from A to B.

Muzamil pushes on Foodpanda specifically — the thirty-rupee deliveries, the Panda Mart subsidies, the dispatches that cannot possibly cover cost. “It’s not sustainable,” he says. “I can see it. It is not.” Naukhez agrees, but with a distinction: there is a smart way to subsidise habits into existence, and there is an insane way. Careem itself, he notes, is still living with the consequences of the insane way. “You don’t want to build wrong habits. It’s very difficult to change.”

The thesis behind Retailo: protect Maksud bhai, don’t replace him

The conversation turns to Retailo itself. Naukhez, his cousin Talha, and his friend Wahaj — the latter at McKinsey, the former two at Careem in Dubai — had been brainstorming ideas before COVID. The pandemic delayed the launch. He and Talha took the first flight that opened from Dubai to Karachi when borders reopened. They went full-time in June 2020.

Retailo’s framing is deliberate. “It is an operating system for small retailers,” Naukhez says. The shop, in his words, is the person. “If that person is at the shop, the shop runs. If that person is not at the shop, the shop does not run.” He calls this person, throughout the conversation, “Maksud bhai” — the corner-shop owner Muzamil grew up sending kids to. There are three million Maksud bhais in Pakistan, and they are running their shops the same way their grandfathers did, on a calculator and a memory. The competition is no longer the shop across the street. The competition is Al-Fatah and Jalal Sons on one side and fifty-plus Karachi dark stores on the other — quick-commerce operators selling a hundred-rupee item for eighty rupees, free shipping included.

“This Maksud bhai has a family,” Naukhez says. “He has four kids, a wife, his sisters at home, parents he is supporting. That shop is an ecosystem. That family has been operating in that community for twenty or thirty years.” Retailo’s bet is that protecting that ecosystem — making the corner shop more competitive — is a better long-term position than building dark stores on top of its rubble. The world, he notes, is moving the same way. After a long arc of globalisation, US and European consumers are now asking how to eat local and support local. Pakistan can skip ahead.

What the product actually does

Muzamil interrupts the philosophical framing with a sharp follow-up: empowerment is an arbitrary word — what does Maksud bhai actually do with Retailo that he could not do before. Naukhez answers in operational terms.

A shopkeeper makes fifty to sixty supplier touchpoints in a typical week. Retailo collapses that into four or five. The mobile app aggregates suppliers, the back end aggregates warehousing and logistics, and an order placed by 11:59 PM is delivered to the shop the next morning. Roughly eighty percent of the portfolio is sourced directly from manufacturers; staples still come through dealers and wholesalers. By aggregating thousands of Maksud bhais on the demand side, Retailo cuts out the box-pushers in the middle — the wholesale layers that, in his words, “just stock goods and take margin without adding any value.” The shopkeeper pays for that convenience, sometimes accepting a price slightly above the wholesale rate, because the cost of going to the mandi himself disappears.

The key choice, Naukhez insists, is to own inventory and logistics in-house. “If we don’t own this piece, we don’t have visibility on what to sell, what Maksud bhai needs.” That data is what makes the next leg — fintech — possible. Retailo does not finance the shopkeeper itself. It partners with Finja and others. But the credit scoring, the decision of how much to finance, when and to whom, sits inside Retailo because Retailo is the only party in the chain that actually knows the shop. “A bank doesn’t know Maksud bhai,” he says. “Bank knows us. We know the Maksud bhai. We are the link.”

Why Saudi Arabia is the headquarters

In a market crowded with Dastgyr, Tajir, and a dozen lesser-known players targeting the same shopkeeper, Muzamil asks the natural question: what makes Retailo prime. Naukhez points first to geography. Retailo is headquartered in Riyadh, operates in Jeddah and Karachi, and was expanding into Islamabad and Rawalpindi the week of the recording. “We see ourselves as a regional company,” he says. The Maksud bhai persona is not Pakistani. It recurs in Sharjah, in Oman, across the GCC — frequently run, in fact, by Pashtun shopkeepers from the same supply pool as Karachi. The second differentiator he names is the team — eight nationalities, much of it sourced from the regional Careem alumni network that did not want to move back to Pakistan and did not have to.

The competitive landscape, he predicts, will consolidate quickly. “I think we’ll see a lot of action happen in this space in the next couple of years, if not months. There are a lot of players trying to target the same Maksud bhai. It doesn’t make sense for ten different people to go to Maksud bhai and offer a slightly different version of the same solution.”

The unfixable layer: agriculture

Earlier in the conversation, Muzamil takes a long detour into the agricultural supply chain — the eight-rupee tomato that arrives at the consumer’s door for a hundred and twenty. Naukhez resists the standard middleman-villain framing. The arhti, he argues, is doing real work. He is financing the farmer. No bank will lend to that farmer; no startup has the data or relationship to underwrite him. “The arhti is not a box-pusher. The arhti’s value is that he’s financing.” The box-pushers come after — the dealers and wholesale markets that stock goods and bet on the market by creating shortage.

The real lever, he argues, is not removing intermediaries but raising the farmer’s yield. Pakistan has some of the worst per-acre yields in the world; the Netherlands, roughly the size of a Pakistani district, exports more agricultural produce than the entire country. Tunnel farming, hydroponics, drone surveillance of soil moisture, district-level soil testing — none of it requires the farmer to be displaced, only educated and capitalised. “Input costs have already gone up four times on fertiliser. Output prices have to rise. The question is whether that extra margin reaches the farmer or stops earlier.” He points to farmer-run YouTube channels with millions of subscribers as a sign that the information layer is, finally, starting to move. Retailo’s exposure to this leg is on staples — wheat, rice, pulses — where the team is now studying how far back toward the producer it can integrate.

The POS utopia

Toward the end of the discussion, Muzamil pushes Naukhez on what he calls the POS revolution — the moment when the Maksud bhai’s shop becomes a fully digitised node, with barcodes at checkout, real-time inventory, accounting baked in, and the by-product gifts of whitelisting, taxation, digital payments and live data. The Foodpanda restaurant tablet is the model he has in mind.

Naukhez agrees the prize is real but is careful about the timeline. The shopkeeper is not a chain store. A chain store pays millions of dollars for ERP implementation, takes six to twelve months to train, and hires an MIS team to run it. The corner shop is two brothers on shifts. “Here the technology has to be very, very different,” he says. The current Retailo footprint covers roughly forty to fifty percent of an average Maksud bhai’s SKUs, out of a market that contains forty to fifty thousand SKUs in total and a Retailo catalogue of around fifteen hundred. Ninety-five to ninety-nine percent SKU coverage is, he believes, eventually possible. A hundred percent is not — the long tail of low-throughput items will never be economic to stock.

By the end of the conversation, Muzamil and Naukhez sketch a different end-state together — one where Retailo connects Maksud bhai not to its own consumer app but to existing hyperlocal marketplaces like Careem’s quick-commerce service. The Maksud bhai’s shop becomes a hybrid online-offline node. The walk-in customer keeps subsidising the unit economics that a pure dark store cannot. The corner-shop owner’s son, when the order comes in, takes the cycle out. Muzamil notes the time — one hour thirty minutes — and apologises for the deliberate poking. Naukhez thanks him for it. The future of retail in Pakistan, in his telling, is not the disappearance of Maksud bhai. It is Maksud bhai with better tools.