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Exits MENA acquires Avanz Capital Egypt in multi-seven-figure deal

Wamda

Press release:

Exits MENA, the region’s first investment platform and advisory firm focusing on startups and SMEs, today announced the signing of a multi-seven-figure transaction in partnership with ACE’s existing local management to acquire Avanz Capital Egypt (ACE), a private equity and asset management firm.

With initial approval from Egypt’s Financial Regulatory Authority (FRA), the transaction represents an important milestone in Exits MENA’s strategy to build an integrated financial group serving investors, startups, SMEs, and financial institutions across Egypt and the wider MENA region.

Under the agreement, ACE’s existing management team, led by CEO and Managing Director Haytham Wagih, will remain in place and retain responsibility for the firm’s operations and investment activities.

The structure is designed to provide existing investors and clients of ACE with continuity, alignment, and confidence in line with international private equity standards, while creating a stronger platform for developing scalable and impactful private capital opportunities.

Avanz Capital Egypt has established a recognised position within Egypt’s private equity ecosystem, with a mandate focused on supporting SMEs and strengthening the country’s private equity and venture capital landscape. Its experience will complement Exits MENA’s advisory capabilities and regional network, creating a more connected platform that combines access to attractive investment opportunities and competitive risk-adjusted returns for investors with long-term value creation across portfolio companies.

“We are now better aligned through ownership participation. Our team remains in place and will continue to expand. Our investment process remains unchanged,” said Haytham Wagih, Managing Director and CEO of Avanz Capital Egypt. “What changes is our capacity to grow and retain key talent. We are delighted to welcome Dr. Nader Elsayed as a shareholder and Executive Director. In contrast, Masa Arafa will continue her leading role as Investment Director with ownership alignment. With Exits MENA, we now have a broader regional platform behind us while developing the way we manage the firm and its portfolio.”

Founded in 2022 by Mohamed Abuelnaga Nagaty, Ayman El Tanbouly, and Ahella El Saban, Exits MENA has expanded its footprint into more than seven global markets. The company has built a strong track record across investment transactions and strategic advisory engagements, supported by a growing network of regional and international partners, having established more than 75 global partnerships, launched three ongoing investment-readiness programmes, and supported more than 2,000 businesses across the region.

“This acquisition marks a defining step in Exits MENA’s journey to build an integrated financial group serving the region. Since 2022, we have worked with businesses across different stages of growth and consistently seen the need for a more connected pathway between investment readiness, advisory services, and access to capital. By bringing private equity and asset management capabilities into our platform, we are completing the ecosystem we set out to build for founders, SMEs, investors, and institutional partners. We believe this model will deliver stronger outcomes for limited partners and portfolio companies while contributing to the long-term development of Egypt’s private capital market,” said the Exits MENA founding team.

The acquisition reinforces Exits MENA’s broader strategy to strengthen the region’s private capital ecosystem by providing investors with access to viable, scalable investment opportunities across Egypt and the MENA region while supporting the development of deeper, more efficient private capital and exit markets.

The expanded platform brings together advisory, private equity, and asset management capabilities under one group, while maintaining strict separation between advisory mandates and investment decision-making to ensure independence, governance, and alignment with investors’ interests.

The next milestone is the rebranding of ACE to Exits Manara as the private capital and asset management subsidiary of Exits MENA. Exits Manara will continue to focus on the management and growth of Manara 1, the existing fund of funds dedicated to SMEs, and will expand AUMs through the establishment of Manara 2 for Export Investments, a new investment vehicle focusing on developing mid-sized exporting businesses to expand into international markets.

The acquisition comes amid a persistent financing challenge facing SMEs and high-growth businesses across MENA. According to the World Bank, SMEs in the region receive approximately 8% of total bank credit, compared with 22% in high-income economies. At the same time, CGAP estimates that the Arab world’s overall SME finance gap stands at approximately $123 billion.

August 20th 2026, 7:29 pm

Private equity can help write MENA’s next growth chapter

Wamda

Among the most pressing challenges facing policymakers and business leaders across the Middle East and North Africa (MENA) is creating high-quality jobs for the region’s young and growing population. By 2050, nearly 300 million young people in MENA are expected to be seeking employment, according to the World Bank. Meeting a challenge of this scale will require more than creating jobs at the margins. It will require stronger private-sector growth that raises productivity, supports economic diversification and enables companies to scale across competitive industries.

Repeated geopolitical shocks have exposed and exacerbated pre-existing vulnerabilities, not only in fragile economies but also across the historically more stable Gulf Cooperation Council (GCC) countries. Addressing the region’s economic challenges will require more than macroeconomic or public-sector reforms. Its longer-term development — including reconstruction and economic recovery in conflict-affected countries — will also depend on unlocking the potential of businesses that can become engines of job creation and catalysts for regional and global competitiveness.

The region’s challenge is not simply a shortage of capital. It is also the absence, in many markets, of the platforms, institutions and enabling environments needed to channel that capital toward scalable businesses and commercially sustainable opportunities. Ultimately, the next phase of MENA’s economic growth will be defined not only by how much capital the region attracts, but by how effectively that capital is converted into productive capacity, competitive businesses and high-quality jobs.

MENA has no shortage of entrepreneurial talent or ambitious businesses across sectors, sizes and stages of growth. Venture capital has become an important source of financing for the region’s early-stage technology and tech-enabled startups. Yet a financing gap remains for established, medium-sized businesses that need growth capital, stronger governance and operational support to expand across markets. This is where private equity can play a much larger role, helping promising local businesses develop into regional champions and drivers of economic growth.

Beyond dealmaking

Private equity is often reduced to financial engineering: buying, restructuring and eventually selling privately held companies to generate returns for investors. But its potential economic contribution extends well beyond the transaction itself.

Growth-orientated private equity can provide longer-term capital while helping management teams improve operations, strengthen governance, build institutional capabilities, enter new markets and invest in productivity and innovation. For medium-sized businesses, this combination of capital and operational support can help overcome barriers to scale that bank lending or venture capital alone may not address.

That impact is not automatic. It depends on the investment horizon, capital structure and approach of the investor. But when capital is paired with operating discipline and a credible long-term growth strategy, private equity can help companies make the transition from successful local businesses to competitive regional enterprises.

Private equity is not new to MENA. Over the past two decades, the region has seen the emergence of increasingly sophisticated private equity investors, supported by institutional investors, sovereign wealth funds and family offices. According to MAGNiTT, disclosed private equity activity in MENA totalled $27.6 billion across 356 deals from 2020 to 2024. The UAE accounted for the largest share of transactions, while Saudi Arabia became an increasingly important market; together, the two countries accounted for 68% of regional private equity transactions over the five-year period.

These figures illustrate the growing role of private capital in financing businesses across sectors that will help shape the region’s economic future, including health care, financial services, logistics, manufacturing and energy.

Yet private equity activity remains heavily concentrated in the region’s largest and most developed investment markets. The question, then, is not whether private equity can work in MENA. It is how it can be deployed more broadly to support economic revival, deepen regional integration and generate development impact in markets where growth capital remains scarce.

Small and medium-sized enterprises make up the vast majority of formal-sector businesses across MENA. Helping the most promising among them become more productive and competitive can therefore be a powerful tool for job creation and economic growth.

This is particularly relevant in fragile economies such as Palestine, Syria and Lebanon, where businesses often face limited access to growth capital, fragmented ownership structures and weak links to regional and international markets. Strategically deployed private equity can help address some of these bottlenecks through recapitalisation, stronger corporate governance, consolidation, market expansion and access to regional networks.

Private equity’s multiyear investment horizon can also be particularly relevant for economies seeking to move toward higher-productivity and more export-orientated models of growth. But its success should ultimately be measured less by deal count or the volume of capital deployed than by whether those investments result in stronger companies, greater productivity and sustainable employment.

Building more integrated ecosystems

Strong investment ecosystems are built when governments, development finance institutions, sovereign wealth funds, local fund managers, entrepreneurs and institutional investors play complementary roles in reducing barriers and directing financial and technical resources toward productive businesses.

This is where private equity fits into the broader regional picture: as a bridge between large pools of capital and companies with the potential to scale.

Governments have a central role in creating the conditions that make this possible, from predictable regulation and investor protection to effective insolvency frameworks, competition policy and cross-border trade. But public investment cannot substitute for private risk capital, particularly the growth financing companies need to expand into new markets and industries.

Development finance institutions such as the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) increasingly combine direct financing with blended finance, risk-sharing and private-capital mobilisation tools designed to make investment possible in markets or projects that might otherwise struggle to attract commercial capital.

These tools become particularly important in fragile economies, where the risk-return profile can deter institutional investors. Blended-finance structures, guarantees, risk-sharing facilities and co-investment platforms with credible local partners can lower some of those barriers and help create a pipeline of investable opportunities with clearer governance and exit pathways.

Regional sovereign wealth funds can play a similar catalytic role by acting as anchor investors, reducing perceived risk and attracting global institutional capital.

A recent example is Brookfield’s July 2026 first close of Brookfield Middle East Partners, a PIF-anchored private equity fund that raised approximately $2 billion from the Public Investment Fund and other global and regional institutional investors. The fund will target buyouts and growth investments across the Middle East, with a focus on the GCC and a goal of allocating 50% of its investments to Saudi Arabia.

The significance of such a fund is not simply its size. It demonstrates how sovereign anchor capital, global investment expertise and a regional mandate can be combined to build a larger pipeline of investable businesses and increase institutional confidence in the region.

Political instability will remain a major constraint on MENA’s economic potential. Private equity cannot, on its own, resolve fragility, institutional weakness or regulatory fragmentation. But stronger and more integrated investment ecosystems can help ensure that capital does more than circulate within the region’s already mature markets.

For the wealthier GCC economies, the challenge is increasingly to deploy capital in ways that deepen productive capacity and strengthen the private sector. For less-developed and fragile economies, it is to use local investment managers, development finance and risk-sharing structures to turn viable businesses into investable platforms capable of attracting long-term capital.

MENA’s next growth chapter will therefore depend not only on mobilising more money. It will depend on building the institutions and investment structures that convert capital into productive companies, regional champions and high-quality jobs.

That is where private equity can make its most consequential contribution.

August 20th 2026, 7:29 pm

Pinnacle launches VC fund to back Saudi growth companies, secondary deals

Wamda

Press release:

Saudi Arabia-based investment firm Pinnacle has launched a venture capital-focused fund targeting growth-stage companies and secondary investment opportunities in the Kingdom.

The fund will invest through both primary funding rounds and secondary transactions, providing investors with exposure to established Saudi growth companies while seeking to increase liquidity within the Kingdom’s venture capital ecosystem.

The launch comes as Saudi Arabia’s venture market enters a more mature phase, with a growing number of established and profitable growth-stage companies. However, Pinnacle argues that access to growth capital and exit opportunities is still more limited than in developed markets, which creates a gap between the maturity of the startup ecosystem and its liquidity infrastructure.

The fund aims to address this gap by providing growth capital, facilitating secondary transactions, and supporting the development of Saudi technology companies.

Its investment strategy will focus on technology businesses across several sectors where Pinnacle sees long-term growth drivers.

In fintech, the fund sees opportunities arising from regulatory developments and the ongoing shift towards digital financial services.

It will also target businesses benefiting from Riyadh’s development as a global city, including companies operating across housing, mobility, real estate and urban services.

E-commerce is another focus area, with Pinnacle identifying room for further growth as e-commerce penetration in Saudi Arabia remains below levels seen in more developed global markets.

The fund will also target health and lifestyle, particularly as greater health awareness drives demand for preventative care and related services.

Through this strategy, Pinnacle aims to provide growth capital to Saudi technology companies while supporting greater liquidity and secondary-market activity within the Kingdom’s venture ecosystem.

August 20th 2026, 7:29 pm

Voice AI startup HeyBreez raises $2.5 million Seed round

Wamda

Press release:

HeyBreez, the operational layer for enterprise voice AI, announces an oversubscribed $2.5 million seed fundraise. 

The raise was led by Lunara Partners – a multi-stage investment firm investing in tech & tech-enabled businesses, chiefly across the MENA region. Other participating investors included Jabbar Group, DASH Ventures, and prominent founders and strategic angel investors. 

The proceeds will be used to deepen platform infrastructure; accelerate product development; and grow the team for sales expansion across enterprises, agencies and developers in the Americas, Europe, Asia-Pacific, and the Middle East. Timing of the seed round has been driven entirely by market demand, to keep pace with the growth in call volumes and inbound requests for HeyBreez’s services.

HeyBreez is flourishing in a market where Voice AI has reached human parity (i.e., artificial intelligence systems now match or exceed human capabilities in recognising, generating, or translating speech). However, the infrastructure to run Voice AI at enterprise scale has not been reached – which is where HeyBreez excels. 

Most voice platforms get the agent talking, then hand back the rest. HeyBreez sits at the operational layer; the part that handles everything around and after the call: retries; callbacks; follow-up logic; branching journeys; telephony; and integrations. These are the workflows that transform a voice agent into a real business process – able to run reliable, low-latency conversations at production scale.

Karim Malhas, Founder & CEO of HeyBreez, said:

"Everyone in this market helped companies make the call. No one helped them run the operation behind it. That is the hard part, and what we built for from day one. This round lets us put HeyBreez in front of all the teams needing it and asking for it. We have a proven product, several different customer types, we’re logging over a million calls a month already, and there is much more to come.” 

HeyBreez is already achieving significant traction, proving its enterprise-grade production output. In a single month, its platform has run over one million calls. Campaign dialling on the platform easily reaches 10,000 calls a day for individual clients.

HeyBreez serves four customer types via a single infrastructure: enterprise clients with dedicated solution support; agencies and resellers building on top of the platform; individual developers and small businesses on self-serve plans; and regional AI players embedding the technology directly into their own products. HeyBreez supports multi-language voice workloads across industries where voice is still the dominant channel, such as: banking, healthcare, logistics, hospitality, and customer experience. 

HeyBreez is building impressive partnerships to build out its channel. Arabic.ai and Xaia are solutions integration partners, reselling HeyBreez to their own enterprise client bases across the region. HeyBreez expects more such partnerships to extend its reach into new markets and verticals, without requiring relationship-building from scratch.

Said Murad, Co-Founder & Managing Partner of Lunara Partners, commented:

"Every platform in this market solved the conversation. Almost none solved the operation around it, the retries, callbacks, integrations, and governance that determine whether voice agents hold up in production. HeyBreez was built for that layer from day one, and the volume already running through the platform shows it. With a multi-channel commercial model and positioning aligned with the rise of Arabic-language and sovereign-cloud voice AI, we believe HeyBreez can become a core piece of the enterprise voice stack globally." 

HeyBreez is formally headquartered in the US with offices in Amman and Dubai and is designed for global deployment. The MENA region is its commercial starting point, supported by rising demand for Arabic-language voice automation and the sovereign-cloud and data-residency mandates being shaped by the GCC’s national champions. The platform is already running across MENA, Europe, the USA, and LATAM. Arabic is now getting the voice infrastructure it deserves, while also creating a platform built to run anywhere.

August 20th 2026, 7:29 pm

XSquare raises pre-Seed round to expand into Saudi Arabia

Wamda

Press release:

XSquare, a business-to-business (B2B) payments company operating in partnership with Mastercard, today announced the successful close of its Pre-Seed funding round. The round was led by Raed Ventures, with participation from AngelSpark, 500 Global and Oraseya Capital, a Dubai government-backed venture fund.

With the new capital, XSquare is scaling what it describes as the region's first and only payment orchestration layer built purely for B2B. The platform unifies multiple payment rails behind a single integration, allowing businesses to collect, pay and reconcile across providers without stitching together separate systems. XSquare is launching with rails from Telr, Geidea, VaultsPay, Spare and Tess Payments, with further partners to follow.

Under its partnership with Mastercard, the company is also bringing Mastercard's B2B payments product to market, enabling card-funded supplier and vendor payments that settle directly to bank accounts. XSquare is deploying the program with marquee government and large corporate clients, unlocking commercial card economics on business spend that has traditionally sat outside the card ecosystem.

Beyond its UAE base, XSquare is live in Qatar, where it holds a presence at the Qatar Financial Centre (QFC) and is partnering with leading banks and regulated payment partners in Doha. The Qatar launch marks the company’s first cross-border expansion and lays the groundwork for a wider GCC footprint.

“B2B payments in this region have been underserved for too long, forced onto tools built for consumer markets. We are building the payment infrastructure that regional businesses need: card and bank rails, orchestration and reconciliation, all in one place. Having Raed Ventures lead this round, alongside AngelSpark, 500 Global and Oraseya Capital, is a strong endorsement of that vision and of the traction we are seeing with Banks, Government entities and large Corporates.”

Tanvir Shah, Co-founder and Chief Executive Officer, XSquare

“The B2B payments opportunity across the GCC is large and still largely untapped, and XSquare is one of the few teams with both the banking depth and technical execution to capture it. Their early traction with Banks, Government entities and enterprise clients, together with their progress on the Mastercard B2B programme, gave us the conviction to lead this round. We look forward to supporting the team as they scale across the region.”

Saed Nashef, Founding Partner, Raed Ventures

XSquare plans to use the funding to expand its rail and bank partnerships, grow its engineering and commercial teams, and begin operations in Saudi Arabia.

 

August 20th 2026, 7:29 pm

AILA raises $3 million pre-Series A to expand personalised learning platform

Wamda

Press release:

AILA, a Saudi education technology company focused on AI-powered personalised learning, has raised $3 million in a pre-Series A funding round. 

The round was led by Rua Growth Fund, with participation from Jo Academy, 500 Global, Bunat VC, and Fikr Ventures. Jo Academy, a leading EdTech pioneer in Jordan with a growing regional presence, also joined the round as a strategic investor, bringing valuable experience in education and digital learning. 

AILA develops technology that helps students learn based on their individual needs. Its platform identifies learning gaps, personalises learning and practice, and provides students with support based on their progress. It also gives teachers and school leaders clearer insights into student performance, helping them identify where support is needed. 

The company’s products include AILA Tests, an AI-native learning platform for personalised exam preparation for schools, and AILA Labs, AILA’s dedicated R&D hub focused on researching, developing, and testing new AI-powered solutions for education. 

The new funding will support AILA across three main areas: 

● Expanding into new regional and international markets 

● Further developing the product’s AI-powered learning experience and capabilities 

● Reaching more students, educators, schools, and education systems 

“This investment lets us bring personalised, AI-native learning to more students at a moment when education systems across the region are rethinking what's possible with technology," said Yousef Alsayed, CEO of AILA.

"Arabic-speaking students deserve learning experiences built for them, not just translated for them. AILA is leading the way in the region, building AI-native education from the ground up, and their traction with Saudi schools speaks volumes about its strong product-market fit. We invested in AILA because we believe the future of EdTech in this region will be built here, by local innovators like AILA," said Alaa Jarrar, CEO, Jo Academy. 

AILA is building an AI-native assessment platform that helps schools and teachers understand each student’s proficiency, identify learning gaps, and focus support where it is needed most. We were drawn to the team’s ability to turn assessment data into actionable insights for educators and targeted practice for students. Rua is proud to lead this round and support Yousef, Abdulaziz, and the AILA team as they scale Saudi-built AI education solutions for schools and education systems across the region and beyond," said Turki Aljoaib, Co-Founder & Managing Partner, Rua Growth Fund. 

The investment marks the next stage of AILA’s growth. Alongside financial support, the investor group brings experience, networks, and market knowledge that can help the company enter new markets and build partnerships across the education sector. 

AILA’s long-term goal is to become a leading AI-native education platform and make high-quality personalised learning accessible to learners at scale. 

August 20th 2026, 7:29 pm

Khwarizmi Ventures partially exits Bosta, marking sixth portfolio exit

Wamda

Press release:

Khwarizmi Ventures is thrilled to announce the successful partial exit from its portfolio company,  Bosta, marking another important step forward for the firm, bringing the total to 6 successful  exits from Tamara, POSRocket, Fatura, Melltoo, Qawafel, and now Bosta. The firm has  distributed capital back to Fund I investors twice in less than 5 years since the launch date. 

Khwarizmi Ventures invested in Bosta three times, starting with its Series A round and later leading  one of the follow-on rounds, backing the founding team for their ambitious vision, customer-centric approach, and ability to execute in one of the region's most dynamic sectors. As Bosta  scaled from an emerging startup into a market leader, Khwarizmi Ventures completed a partial exit, realising about a 3x net multiple across its total position. This step reflects the value created  through Bosta’s growth and the strength of the partnership built from the company’s earliest stage.

"We're incredibly proud of Bosta team and grateful to be part of their journey. This  achievement reflects the founders' vision, relentless execution, and the strength of  innovation emerging from the MENA startup ecosystem. We look forward to the  company's next chapter of growth. 

— Abdulaziz AlTurki, Managing Partner at Khwarizmi Ventures 

Since its founding in 2017, Bosta has transformed logistics and last-mile delivery by providing  businesses with reliable, technology-driven shipping solutions. Through continuous innovation  and strong execution, the company has expanded its reach, strengthened its market position, and  delivered meaningful value to merchants and consumers. 

"Bosta was founded to solve one of the biggest challenges facing e-commerce in our region:  reliable, scalable last-mile delivery. Over the years, we’ve evolved into a platform that  supports thousands of businesses and enables commerce across multiple markets. This  outcome reflects how far Bosta has come and the strength of the team behind it. We’re excited  to build on this foundation and continue expanding Bosta’s impact across the region." 

— Mohamed Ezzat, Founder & CEO at Bosta 

This achievement reinforces Khwarizmi Ventures' commitment to partnering with exceptional  founders to build category-defining technology companies across the region. We congratulate the  entire Bosta team, including its employees, customers, investors, and partners, on their success  and wish them continued success in the years ahead. 

August 20th 2026, 7:29 pm

Cyfr Capital backs five Omani startups in new Seed Fund investments

Wamda

Press release:

Oman-based venture capital firm Cyfr Capital has completed five new investments through its Seed Fund in collaboration with Future Fund Oman, backing startups operating across automotive commerce, food delivery, tourism, artificial intelligence and food packaging.

The five companies are Sooq Cars, iO Eats, Darrbak, Decoil and Pack’N. The investments form part of Cyfr Capital’s strategy to support early-stage companies developing products and services for the Omani market with potential to scale.

Sooq Cars operates an automotive trading platform serving Oman and the wider Gulf. Its services span vehicles available from stock, imports, spare parts and leasing, and the company has a user base exceeding one million, according to Cyfr Capital.

iO Eats operates a food delivery application supported by cloud kitchens across six locations. The platform allows users to order from more than 30 restaurants in a single basket.

Darrbak operates a tourism discovery and booking platform in Oman, offering more than 260 experiences across adventure, sports, nature, arts and culture. It works with more than 76 local providers.

Decoil develops data and artificial intelligence solutions designed to help organisations process unstructured data and convert it into actionable insights.

Pack’N operates in the food and beverage sector, providing customised packaging and smart storage solutions to businesses.

The investments are intended to provide the five companies with capital to develop their products and services and expand their operations, as part of the collaboration between Cyfr Capital and Future Fund Oman to support early-stage businesses in the Sultanate.

The parties did not disclose the value of the individual investments, the total amount invested or the equity stakes acquired in the five companies.

August 20th 2026, 7:29 pm

Tax Star closes $1.75 million Seed round to expand across GCC

Wamda

Press release:

Tax Star, the UAE's first AI-powered corporate tax software platform, announced it has closed a $1.75 million seed funding round. The raise comes as Tax Star positions itself around one of its most significant regulatory milestones to date, its status as a pre-approved Accredited Service Provider (ASP) for UAE e-invoicing. The round was backed primarily by angel investors.     

Tax Star built its reputation as the first AI-powered corporate tax compliance software in the UAE, helping businesses navigate the country's evolving tax landscape with automation and intelligence at the core of its product. This new funding builds directly on that foundation, with the company now doubling down on its role in the UAE's e-invoicing rollout, a mandate that will require businesses across the UAE to appoint an ASP and implement a compliant e-invoicing process connected to the UAE Electronic Invoicing System.

As a pre-approved ASP, Tax Star is positioned to serve as a trusted bridge between businesses and the UAE's e-invoicing infrastructure. Being pre-approved validates Tax Star's technical readiness ahead of key regulatory deadlines and signals to the market that the company is positioned to capture demand as UAE businesses work to become compliant.

Proceeds from the round will be directed toward three core areas: go-to-market expansion, product development, and simplifying compliance for businesses navigating the UAE's e-invoicing requirements. Rather than allocating the raise narrowly toward specific accounting-software integrations or new-market entry alone, Tax Star said the funding is designed to strengthen the of what businesses need to become, and stay, compliant.

The raise also supports Tax Star's broader regional ambitions. The company has stated plans to expand into the GCC     as part of its longer-term roadmap. The UAE's e-invoicing framework and Tax Star's early positioning within it, is expected to serve as proof as the company pursues similar opportunities in other markets undergoing their own digital tax transformations.

Tax Star also acknowledges that being part of the Plug and Play and Dubai Founders HQ (DFHQ) start-up program helped Tax Star to prepare themselves for this investment round and helped refine its future expansion plans. The company is also part of the Microsoft for Startups Program and is aspiring to join Dubai's D33 initiative.

The timing of the raise aligns with a fast-approaching regulatory calendar. Businesses in the UAE with annual revenue of AED 50 million or more      face an ASP- appointment deadline of October 30, 2026, ahead of the first mandatory implementation phase for businesses with annual revenue of AED 50 million or more in January 2027. Tax Star said the new funding is intended to help ensure UAE businesses, regardless of size, are equipped to meet these deadlines without disruption to their operations.

"This funding allows us to focus on what matters most right now: easing the compliance burden for businesses across the GCC as e-invoicing becomes a reality," said Rayhan Aleem, Co-founder and CEO of Tax Star. "Being a pre-approved ASP puts us in a strong position to support businesses through this transition, and this raise lets us invest in the team, the product, and the go-to-market work needed to do that at scale."

Tax Star is the UAE's first AI-powered corporate tax software platform and a pre-approved Accredited Service Provider for UAE e-invoicing. The company is also the only Accredited Service Provider listed on the Xero and QuickBooks App Stores offering native integration with those accounting platforms, alongside smooth integrations with Zoho, Odoo, and Naqood. Tax Star helps businesses simplify tax and compliance obligations through automation and AI, with plans to expand its footprint across the GCC and into Europe.

August 20th 2026, 7:29 pm

Rozenama raises $150,000 pre-Seed to scale e-commerce platform across Iraq

Wamda

Press release:

Iraq-based e-commerce startup Rozenama has raised $150,000 in a pre-Seed round from Iraqi entrepreneur and Aljasmi Perfumes CEO Mohammed Haider.

Founded in Baghdad in 2022 by Abbas Muhil and Mohammed Fawzi, Rozenama provides an e-commerce platform built for Iraqi merchants. Its infrastructure incorporates local delivery companies and payment methods, including cash on delivery.

The company is targeting a market where many retailers continue to sell through social media platforms such as Instagram and WhatsApp, receiving orders through direct messages and manually managing inventory. Rozenama is seeking to bring these processes into a structured digital system that enables merchants to manage and scale their online operations.

Over the past 12 months, Rozenama says its number of active merchants has increased from 250 to more than 900, while registered users have surpassed 13,000.

The company plans to launch a fully rebuilt version of its platform on 25 August 2026.

Proceeds from the round will primarily be invested in engineering, including the platform rebuild, and expanding Rozenama’s merchant base across Iraqi governorates outside Baghdad. The company said markets outside the capital have accounted for most of its growth over the past six months.

August 20th 2026, 7:29 pm

Jordan’s liwwa closes $18.5 million pre-Series B round

Wamda

Press release:

Jordan-based Fintech liwwa closed an $18.5 million pre-Series B round of equity and debt. Founded in 2015, liwwa employs technology across its operations to provide tailored financial solutions. It also owns and operates the liwwa Investment Platform, a peer-to-peer platform that enables retail investors to finance liwwa loans and earn returns. 

The round included $4.5 million in equity investment led by existing investors, DASH Ventures, Dutch Entrepreneurial Development Bank FMO, Edgo, and Bank al Etihad, in addition to German Development Finance Institution DEG approving an investment of $0.79 million. The round also included debt contributions from a network of local banks and international development finance institutions; Bank al Etihad increased its debt financing agreement by $5 million, whereas an additional $8.5 million debt facility was raised from the Capital Bank of Jordan under the NASIRA agreement, Jordan Kuwait Bank and Triodos Bank extended a $1.1 million and a $2.2 million finance facility respectively, PROPARCO approved a €1< facility and Triple Jump approved a $500,000 loan.

liwwa will be utilizing the funds for its growth and expansion plans. liwwa’s CEO, Dennis Ardis, shared his thought on the funding round, “With this funding round, we have yet taken another major step towards accomplishing our goals. We will continue to grow as the market grows by bringing in innovative Fintech solutions and cash flow-based lending."

September 11th 2022, 7:40 am

Medical training platform 5 Quarters raises Seed round

Wamda

Press release:

Cairo-based medical Startup "5 Quarters " has raised Seed investment from a Saudi angel investor.

Founded in 2016 by Mohamed Salah and Noha Emad, 5 Quarters started as a medical and dental courses startup and has been in the market for medical education for more than 6 years mainly in Egypt.

The name comes from the 4 branches of The Healthcare sector; medical, dental, pharmaceutical, and physiotherapy. The fifth quadrant is what they promise; the extra value you won't find elsewhere is what they offer.

The startup offers healthcare professionals online courses (available on its web and mobile-based platform) by the best trainers in their field with the latest technology and content with ADA-accredited certificates, in addition to practical training and on-ground courses to practice what they have learned to get the best benefit and show their work.

They have served over 15k customers to date in Egypt, Saudi Arabia, Libya, Iraq, UAE, Tunisia, and Jordan.

They found that healthcare graduates and professionals were suffering from three main issues; outdated content and lack of good training in the faculties, expensive traditional training, etc...

5 Quarters addresses all of this, offering a wide range of online courses by the best trainers with ADA-accredited certificates. Along with practical training and offline courses.

5 Quarters plans to use the investment to fuel its growth in both directions; horizontal growth by expanding our practical practice into Saudi Arabia and vertical growth by adding new services to the medical sector professionals, clinics and hospitals.

They added that Since their early beginnings they were driven by youth's intense passion and a genuine sense of duty to help the medical community everywhere by providing better education while maintaining affordable prices.

September 11th 2022, 7:40 am

Mena startups raised $378 million in August 2022

Wamda

Startups in the Middle East and North Africa region (Mena) raised $378 million across 33 deals, a 260 per cent increase in funding value month-on-month but a relative dip in terms of deal count. 

This takes the total amassed in the past eight months to $2.2 billion, a 29 per cent increase from the $1.7 billion recorded during the same period last year.

Last month saw two of the biggest funding rounds recorded this year in the region's tech ecosystem, with fintechs Tabby and Tamara raising $150 million and $100 million respectively, making up 66 per cent of the VC funding value. 

Setting aside the two outliers, just $128 million was invested in startups across Mena in August. 

Thanks to Tabby's large round, the UAE attained the number one spot on the list of the countries that attracted the maximum funding with $233 million. 

Saudi Arabia was the second largest recipient of funding with $103 million raised across six deals, with Tamara being its biggest fundraiser, while Egypt followed in the third position with $38 million. Both UAE and Egypt were neck to neck in terms of deal count.

The modest recovery seen in August has been widely felt across all funding stages with the earliest stages of funding witnessing the highest deal count. Out of 33 deals, 15 went to startups across the pre-Seed and Seed stages, cumulatively amounting to $14.5 million.

The lingering uncertainty in market conditions have largely dented the ability of growth stage companies to raise new rounds of equity, and so we are likely to see more extention or bridge rounds over the coming few months. This was evident in the case of Egypt's furniture e-commerce company Homzmart and UAE-based adtech ArabyAds and digital real estate investment platform Stake. These startups also happen to be among the top fundraisers last month. 

Startups operating in the fintech space piqued investor interest in August particularly startups in buy now pay later, crypto currency and neobanking. In terms of value, fintech remains the best-funded sector, representing 68 per cent of the total funding activity. E-commerce came in second place with $32 million raised across five deals, followed closely by adtech. Yet, SaaS startups attracted the highest number of deals with six investments aggregating to $16 million.

Global funding activity remains subdued, with only 13 deals out of 33 attracting foreign direct investments. 

Regionally, Saudi Arabia-based investors were the most active, taking part in 10 deals, followed by their counterparts from the UAE with eight deals.

As ever, startups with an all-male founding team attracted the bulk of funding last month with 99 per cent, while the remaining 1 per cent went to startups founded or co-founded by women.

Key market highlights 

Apart from the funding, last month saw a rise in the mergers and acquisitions (M&A) activity.

UAE-based proptech Huspy, which recently closed a $37 million Series A round, announced its takeover of two mortgage brokers: Just Mortgages and Finance Labs, while logistics startup Cartlow purchased Melltoo. This came on the back of its recent completion of a $18 million round. 

Other deals include Maya Group's acquisition of Conktr, Astratech of fintech PayBy and KABI of HR tech startup BLOOVO.

In August, a couple of startup-focused funds were launched. Algeria Startup Fund announced its new fund worth $411 million earmarked for local startups, while G42 also launched a $10 billion fund to invest in growth stage startups.

Last month, Mosool, Jwava, Cargoz, Mintroute, OBM Education and Sponix Tecb did not disclose the exact amount they raised. We have assigned them a conservative amount of $100,000 each. 

These monthly reports are a collaboration between Wamda and Digital Digest.

 

September 8th 2022, 12:10 am

Endure Capital closes first round of $50 million fund

Wamda

Press release:

Endure Capital announced that it has completed the first close of its new $50 million fund to invest in early-stage startups in pan-Africa. The fund, Endure 21, is Endure Capital’s second early-stage venture capital fund and will focus its investments primarily on impact-driven early-stage startups in Africa, with a selective approach to investing in growth-stage startups globally.

The limited partners who have invested in the fund include British International Investment (BII) – the UK’s Development Finance Institution and impact investor, formerly known as CDC Group; The Micro, Small, and Medium Enterprise Development Agency (MSMEDA) – Egypt’s Social Fund for Development; and founders of different leading startups of the region. 

“BII is excited to be partnering with Endure Capital, a well-embedded leading local fund manager in Egypt’s entrepreneurial ecosystem. I am delighted that our partnership on Endure21 will help support the next generation of visionary entrepreneurs in Egypt, providing them with the capital to build transformative businesses that are creating innovative solutions and accelerating productive, sustainable and inclusive growth across society.” commented Abhinav Sinha, Managing Director and Head of Technology and Telecoms, British International Investment.

“MSMEDA is proud to partner with Endure Capital to promote the Egyptian economy by supporting the entrepreneurial environment and enabling young innovators and entrepreneurs,” commented Hany Emad, Director and Head of the central sector for financing small projects at MSMEDA.

Launched in 2015 by serial entrepreneur Tarek Fahim, Endure Capital has established itself as one of the leading VC firms in the region. Its first fund was one of the early institutional investors in Careem which was acquired by Uber for $3.1 billion in 2019. The acquisition remains the biggest tech exit the Middle East has seen. The investments from Endure’s first fund also include regional B2B e-commerce leader MaxAB and Breadfast, the grocery delivery startup that has pioneered dark stores in Egypt. 

Endure’s debut portfolio also includes international iconic startups such as Boom Supersonic, Tribal Credit, and Aspect Biosystems. The first fund has made a 43 per cent IRR and 4.3x multiple on its investments, which puts it in the top quartile of performing funds of its vintage year. 

Commenting on the first close of its second fund, Endure Capital’s founder Tarek Fahim, said, “Endure is committed to adding value to the region’s flourishing startup founders, and ecosystem, and we love to partner with founders that relentlessly pursue entrepreneurship as a means for value creation to society and who are building lasting businesses.” 

With Endure 21, the firm will follow a sector-agnostic approach and invest in 24 companies. Endure Capital will reserve half the fund for follow-on investments in its top-performing companies from its portfolio. 

For its second fund, Mohamed Noweir joined Endure Capital as a partner to lead the investment team. Noweir has over 15 years of business and startup experience across IBM, McKinsey & Company, Careem, and Rocket Internet. 

The new fund has already made several investments including co-leading Series A of Brimore, Egypt’s leading social commerce platform; investing in Cassbana, a BNPL alternative credit solution for SMEs; and in Pylon, a smart infrastructure startup providing a subscription-based “Smart Metering as a Service” (SMaaS) for electricity and water companies in emerging markets.

“There are a lot of exceptional founders in the region and we are super excited to partner with them early on in their entrepreneurial journey. And we are also thrilled to kickstart “Endure…Pay it Forward” initiative where we work with our portfolio founders to mentor aspiring founders and give back to our new budding startup environment.” commented Mohamed Noweir.

Endure has also launched the Endure Opportunity Fund which will double down on its previous top investments. “We are here to serve our founders in the long-term, and want to invest in their startups’ entire lifecycle – our strategy as a firm is to provide patient, long-term support to entrepreneurs,” concluded Tarek Fahim.

September 7th 2022, 9:56 am

UAE-based fintech Ziina expands to Jordan

Wamda

Press release:

Ziina, the UAE-based, YC-backed start-up on a mission to bring financial freedom to every person in the Middle East, is coming to Jordan. Having launched their digital wallet in February 2022, and their proprietary payment keyboard, the Ziiboard, just this month, the Jordanian expansion is the latest milestone in a rapid succession of innovation for the fintech company.  

For co-founders Faisal and Sarah Toukan, Ziina’s first international foray represents a sort of homecoming.  Both founders grew up in Amman before continuing their higher studies in the United States. Their decision to move to Jordan before any other Middle Eastern country came out of their desire to uplift and strengthen their home country by expanding access to financial services.

Faisal Toukan, CEO and Co-Founder of Ziina said, “The median age in Jordan is around 23 years old, which makes most of the population digitally native. The Central Bank of Jordan has recognized this, naming microfinance, digital financial services, and small and medium-sized enterprise finance among its core sectoral pillars. As a proud Jordanian, I am delighted to introduce Ziina to my home country. Our team have worked tirelessly to develop a product that makes the payment process infinitely faster and more convenient, while also prioritising a delightful user experience. We have no doubt that Ziina will make getting paid much easier for every single Jordanian.”

Today, Ziina is one of the few MENA companies to make it to the Y-Combinator. The company successfully raised $9 million during a Seed round from prominent investors, including Avenir Growth, Goodwater Capital, ANIM, Oman Technology Fund, Class 5 Global, Long Journey Ventures, Graph Ventures, Jabbar Internet Group, Wamda, and FJ Labs, as well as employees and execs at PayPal, Instagram, Stripe, Revolut, Venmo, Brex, Checkout.com, Notion, Block, Airbnb and Deel.

Heralding a new age of digital consumer finance requires a strong team. The Jordanian siblings along with their Californian cofounder Andrew Gold have recruited a world-class team with experience from the likes of Apple, Uber, Coinbase, Careem, Yandex, Funding Circle, Bain & Co, Talabat and Oracle. 

A standout feature of Ziina’s product is its design, having been recognised and awarded nine international UI/UX design awards, including the Red Dot Award. The interface allows users to easily send and receive payments to anyone in just a few taps. Ziina eliminates the need for tedious IBAN and swift code entry and makes the payment experience seamless and social, with GIFs, photos, text and emojis.

Ziina believes access shouldn’t be a privilege but a right. The company is focused on developing state-of-the-art tools that are delightful to use, empowering individuals to gain more control of their financial future. Ziina believes this financial prosperity should be in the palm of your hand; it is pioneering the future of personal finance.

Peer-to-peer payment services are on the rise globally as they eliminate the need to make physical cash payments. For Ziina, Jordan represents the next exciting chapter in the company’s mission toward financial freedom in the Middle East. 

September 7th 2022, 9:56 am

TruKKer raises $100 million pre-IPO round

Wamda

Press release:

Investcorp, a leading global alternative investment firm, today announced that Investcorp Saudi Pre-IPO Growth Fund LP led the Pre-IPO round in privately-held TruKKer Holding Limited, MENA’s largest digital freight network with a leading position across Saudi Arabia, the United Arab Emirates, Egypt and neighbouring countries. Investcorp led the initial close of this round with a $51 million investment alongside new and existing investors.

Hazem Ben-Gacem, Co-Chief Executive Officer of Investcorp commented: “Saudi Arabia is increasingly rich in highly investable companies, from fast-growth technology businesses like TruKKer to long-established family businesses that have grown consistently and are now looking for capital to implement more ambitious expansion plans. We are seeing a lot of interest in pre-IPO rounds as scale-ups secure greater market share and more Saudi businesses prove themselves successful on a national and regional basis. TruKKer is just one example of the kind of company that we believe will prove attractive to institutional investors as the Saudi ecosystem matures, and our Pre-IPO fund will focus on exactly these kinds of high-growth businesses.”

“We are excited to add TruKKer to our portfolio and are keen to work with the founders of this regional champion to explore a possible market listing, as a continuation of our strategy and in line with our track record,” said Walid Majdalani, Head of Private Equity MENA and Southeast Asia at Investcorp. “Thanks to its proprietary technology, TruKKer is ideally positioned to continue its strong growth while reducing carbon emissions across its markets. We look forward to our partnership with TruKKer and contributing our strategic and capital markets resources as well as our local and global insights to accelerate the company’s next phase of growth.”

This investment is part of the recently launched Investcorp Saudi Pre-IPO Growth Fund LP, targeting equity growth capital investments across a range of companies primarily based in Saudi Arabia with the potential to access the capital markets within 3 years. The fund provides investors with an opportunity to gain exposure to growing and market-leading businesses in strategic, high growth and underserved sub-sectors such as business services, transport and logistics, healthcare and consumer. 

The United Arab Emirates and Saudi Arabia are key markets for TruKKer and represent a significant portion of the company’s revenues. The United Arab Emirates market has witnessed strong growth over the years in large part due to the development of UAE – KSA cross-border lanes with over 30,000 annual shipments transported by TruKKer, a key value proposition as the company continues to focus on scaling its network and looking to gain market share. 

“TruKKer is at a key inflection point towards scaling its network and market share. Today, the company continues to grow exponentially serving over 700 B2B enterprise clients and is on track to cross $200 million in revenues in 2022. The TruKKer team is proud to be delivering on its vision of making a positive contribution to the community by having close to 10,000 drivers generating more than 70% of their monthly income on the TruKKer platform. Our technology also enables us to optimize truckloads to reduce empty miles and idle time thereby helping us achieve our sustainability objectives.” commented Gaurav Biswas, Founder & CEO of TruKKer.

“We welcome Investcorp and are excited to partner with them through the next growth chapter of the company. Together with our partners, we look forward to continuing to bolster the company and create significant shareholder returns with a focus on healthy unit economics” adds Gaurav. 

In 2008, Investcorp established a dedicated presence in Saudi Arabia, and TruKKer marks Investcorp’s eighth investment in the country, with multiple successful public listings on the Saudi Stock Exchange, including BinDawood Holdings, Theeb Rent A Car, Leejam Sports Company and L’Azurde. 

September 7th 2022, 9:56 am

UAE’s Tabby expands to Egypt

Wamda

Press release:

Tabby, the Middle East’s leading payments and shopping app, announced its launch in Egypt, enabling shoppers to pay over time without any interest or fees. Tabby works with multiple brands including Lacoste, L'azurde, Faces, In Your Shoe, KAI Collections, Ariika, Marcqa, Dresscode and Floward, among others, to offer flexible payments at checkout, creating an opportunity for Egyptians to stay in control of their spending and make the most out of their money.

Tabby currently ranks among the top 10 shopping apps in the Middle East with more than two million active shoppers. With Tabby’s “Split in 4” product, shoppers will be able to split their purchases into four interest-free payments at store checkouts, both online and offline. The Tabby app lets customers discover where they can split their payments and track their spending. Tabby also helps drive high-intent traffic to thousands of its retail partners. 

Ahmed Khalil, Tabby Egypt’s GM, said, “Expanding in Egypt is a proud moment for us at Tabby. We’re excited to provide Egyptians with flexible and honest payment experiences with no interest and no fees. We’re also delighted to be a growth partner for our retail partners by helping them tap into millions of active shoppers”. Khalil added, “After securing $275 million in funding from leading global and regional investors, we’re looking forward to becoming Egypt’s preferred BNPL services provider.”

Tabby’s launch in Egypt is an expansion of the growing maturity of the fintech landscape in the region and the rise of e-commerce in Egypt. The app is building financial products designed to create financial freedom in the way people shop, earn and save by reshaping their relationship with money. Built on trust, not interest, the app enables commerce while encouraging responsible spending by empowering its shoppers with more purchasing power.

Since its launch in 2019, the company has been committed to helping its customers navigate the complex relationship with money by crafting honest products and stories built to champion their financial goals and help them create a relationship with money they can be proud of. 

September 6th 2022, 10:54 am

Flat6Labs, SANAD launch agritech accelerator in Egypt

Wamda

Press release:

Flat6labs, the region’s leading seed and early-stage venture capital firm, in collaboration with SANAD Entrepreneurship Academy, launched an agritech accelerator program to assist 10 to 12 startups in each cycle to improve their business models, product development, customer relationships, marketing plans, and financial management. The collaboration marks the beginning of Flat6Labs’ mission to support emerging businesses in the agri-food, food security, and rural development sectors while highlighting the value of the agritech industry in Egypt.

The agri-tech program will give startups access to capital, to grow faster and efficiently, encouraging the development of technologies that make the agriculture industry sustainable, safe, and environmentally friendly. These technologies optimize service quality in the agriculture industry, by facilitating data collection and analysis to quantify performances while limiting overprice of products/services.

‘’With digital transformation progressing rapidly across industries, and the agriculture industry being a core pillar of the Egyptian economy, the need to digitize the agriculture industry has increased dramatically. We are glad to launch this agritech accelerator program in collaboration with the SANAD Entrepreneurship Academy, as it will serve this need by supporting the startups that provide innovative technologies in the agriculture sector and will contribute to the sustainable growth of the Egyptian economy,” stated Hassan Mansi, Flat6Labs Head of Ecosystem Development Programs.

Empowering and promoting Egypt's Agri-digital sector would result in advancements in automated machinery and robotics, increasing the efficiency of agricultural productions by precisely locating nutrient availability, checking for diseases, predicting them, and many other useful facilities.

Kim Reichel, Chairperson of the SANAD Technical Assistance Facility Committee said, ”We are very much looking forward to our cooperation with Flat6Labs as they have shown a strong commitment to supporting innovative and technology-driven entrepreneurs across MENA. Together, we will create a positive impact by providing targeted support and enabling business owners to thrive. We believe that focusing on the agricultural sector, and specifically, agri-tech is vital in these challenging times and will contribute to increased food security across the region.” 

Flat6Labs Egypt and SANAD Entrepreneurship Academy will continue to support bright, passionate, and tech-driven entrepreneurs in Egypt, by providing funding, technical assistance, and networking opportunities across the country and beyond. The venture capital firm will continue to be a cornerstone of the digital transformation of the Egyptian economy building successful job-creating startups that contribute to the economic development in Egypt.

September 6th 2022, 10:54 am

SVC invests in Jordan's Propeller's second fund

Wamda

Source: Arab News

The Saudi Venture Capital Co. has invested in Jordan-based venture capital firm Propeller — which specializes in funding early stage software-as-a-service, enterprise software and cloud infrastructure startups.

The move comes within the company’s program to invest in funds and stimulating startups, especially in their early stages, Saudi Press Agency reported, citing CEO Nabeel Koshak.

He added that Saudi Arabia is witnessing unprecedented growth in the volume and quality of start-up deals.

This happens as a result of the emergence of many innovative entrepreneurs, VCs, and angel investor groups, in addition to the availability of a sophisticated regulatory and legislative environment. 

The value of the investment was not specified. 

Established in 2018, SVC is a government company that contributed to the development of the venture investment system by investing in 30 investment funds. 

September 6th 2022, 10:54 am

Egyptian car service app 3atlana closes Seed round

Wamda

Source: The Startup Scene

3atlana, an Egypt-based car service app, has raised a six-figure seed round from Ghabbour Auto, a leading automotive company in Egypt to strengthen their AI system.

Founded in 2020 by Sherif El Adham, Ahmed Hassan, and Amr Hesham, 3atlana aims to make essential car services easier, faster and more efficient by providing everything a driver may need, including scheduling maintenance, roadside assistance, and a connection to nearby service providers.

Through the 3atlana app, users will be able to access door-to-door services, where an engineer and mobile car centre will be sent to their location, and they will be able to purchase spare parts with a three-month guarantee. For those wishing to buy a used car, 3atlana can inspect the car through its resale car service, giving buyers the assurance they need before making their purchase.

“We are very proud to continue growing our company with support from one of the biggest automotive companies in Egypt,” Sherif El Adham, Co-Founder and Chief Operating Officer at 3atlana, tells StartupScene. “This round of funding comes at an ideal time as we’re looking to further advance our technology, and continue expanding locally as well as regionally across the Middle East.”

The new funding will be used to strengthen the startup’s AI technology feature, which in turn would allow them to continue providing users with innovative car service solutions. To date, the app has been downloaded more than 25,000 times, and over 9,500 cars have been serviced by 3atlana.

Although it is a young startup, 3atlana has participated in several incubators and accelerator programmes such as Enpact Covid-19 Relief Program and Flat6Labs Cairo. Flat6Labs Cairo and Ghabbour Auto are also board partners with 3atlana.

September 5th 2022, 10:39 am

Egypt's el-dokan raises $550,000 pre-Seed round

Wamda

Press release 

el-dokan, the first-of-its-kind company to offer enterprise e-commerce technology, in MENA has announced that it successfully secured a $550,000 pre-Seed round, led by a cluster of local and regional investors including EFG EV and Flat6Labs, 500 Global and Hala Ventures.

E-commerce is now an integral part of every retailer’s business strategy, and technology builders and platforms are scrambling to provide retailers with the best technology to help them scale up and optimize their operations. Unlike companies like Shopify and other local shop builders in the region whose focus is to address the needs of smaller retailers, in its latest turn, el-dokan provides e-commerce APIs for large- and medium-sized retailers as well as startups, enabling them to build highly customized and personalized e-commerce stores. 

Launched in late 2020 in Egypt, el-dokan primarily targets large retailers and chain stores seeking to expand their e-commerce market share, increase sales and operation automation.

Utilizing "headless e-commerce technology, el-dokan offers the optimal technology infrastructure that allows tech teams to develop highly customizable e-commerce with maximum flexibility to help businesses respond faster to changing business needs and keep up with the rapid changes in e-commerce.

Besides retailers, it also targets software companies and developers that work directly with enterprises looking to build their e-commerce stores in fast and cost-efficient manner, with 300+ available API endpoints.

Commenting on the announcement, Ahmed Maher, co-founder and chief executive officer (CEO) of el-dokan, said that the key reason behind the company's ability to earn the trust of investors and close its pre-Seed round is the fact that el-dokan is among the very select few companies that focus on building advanced software using cutting-edge technologies such as headless, composable e-commerce architecture.

"The majority of retailers have repeatedly shown the willingness to either replace the traditional e-commerce methods with more advanced and flexible technology. The technology pioneered by el-dokan 'changes the equation' by helping retailers drive sales growth while simultaneously bringing down maintenance costs, making it possible for our retailers to quickly and easily develop APIs connections with our partners to ensure the highest levels of operational efficiency. Our technology can easily integrate with any third-party providers like payments, shipping, point of sale (POS) and (ERP) systems," commented Mohamed Yousry, chief technology officer (CTO) and co-founder of el-dokan.

“After seeing the great impact el-dokan has had on enterprise businesses in MENA, and the profound growth we’ve experienced over a short period of time, we’re excited about the fact that our clients managed to achieve $45 million GMV after migrating from other global well-known software solutions that don’t meet the present-day challenges ours. We are now serving a global roster of clients such as Procter & Gamble (P&G), Misr Pharmacies, Mobily, Zahran stores and Apple Premium seller Switch Plus, along with grocery delivery app Appetito, among others. And this is a testament to the ability of regionally-based tech startups to develop leading-edge technologies trusted by large, international brands and compete with global counterparts," Yousry explained.

For his part, Walid Hassouna, CEO of valU, Egypt's leading buy now pay later (BNPL) platform expressed his excitement over the company's successful completion of its initial funding round which counts EFG EV among its earliest backers. "We are looking forward to exciting times ahead with el-dokan and its all-star team who are able to carve out a niche for themselves in the rapidly-evolving e-commerce market," said Hassouna.

 

September 5th 2022, 6:09 am

Carzami raises pre-Seed investment from Contact Financial Holding

Wamda

Press release:

Carzami, an online retailer for quality used cars and vehicle financing, today announced the close of a pre-seed round led by Contact Financial Holding, together with a scalable inventory financing facility, which it plans to use to transform Egypt’s used car market targeting $30 million in revenue by 2024. 

With this strategic investment from Contact, Egypt’s largest non-bank financial services provider, Carzami is positioned to launch its innovative model for a digital car dealership while being able to offer crucial vehicle financing and insurance options.

Carzami aims to fix the Egyptian used car market by providing consumers with an online platform offering certified and reconditioned used cars with 360-degree virtual tours and inspection reports. Customers can order any car they like to be delivered to their doorstep to test drive, and then purchase with financing and insurance options.

Carzami understands that the fragmentation and mistrust that characterizes the used car industry is unconducive for business growth. With the funding, Carzami seeks to continue growing its inventory. Along with that, Carzami is looking to expand its fleet of delivery haulers, enhance its operational technology, build a productive team, and build a modern reconditioning facility. Importantly, Carzami will utilize the funding in optimizing its organizational efficiency and building on the existing functions, such as vehicle financing.

Carzami hopes to gain an advantageous edge over its competitors by providing exceptional services and building on its consumer trust. This will be achieved by premiering the 30-day Carzami Protection Program and a 7-day “Test to Own” service where potential buyers can try out a vehicle for 7 days/200km to reach a conclusion. Ultimately, they can get a full refund or trade in with another. Here, Carzami aims to ensure that consumers get value for their money. Carzami seeks to become a pioneer in the used car industry by offering consumers top-of-the-line services. 

Hazem Moussa, Chairman of Contact Financial Holding, stated that “Our faith in digitizing the automotive market in Egypt has been with us from our early years, we launched contactcars.com in 2002 as the first car marketplace and community for both new and used cars. In addition, Contact pioneered financing of used cars over 10 years ago, now we believe we can support Carzami in its quest to re-invent the used car purchase experience”.

Said Zater, CEO of Contact Financial Holding added “Our support to Carzami comes as a part of our continuous effort to connect with the startup scene in all aspects we can complement their work with. We believe in the ongoing digitization of services led by exciting startups like Carzami”.

Co-founded in 2022 by Hussein Hosny and Adham Hosny; 2 seasoned entrepreneurs in the automotive space. They started this business venture to address the problems associated with buying and selling used cars. They define themselves as an online-based venture that helps clients to navigate the tedious process of buying and selling used cars. 

Carzami Founders, Hussein Hosny & Adham Hosny, commented, “We aim to change the way people buy and sell used cars by providing a seamless one-stop-shop platform that offers online buying, selling, and high-quality financing options. Our experience is all about trust and transparency, allowing consumers to overcome the hassle of traditional dealerships”.

Both Hussein and Adham boast extensive experience in the automotive space. The duo co-founded Sa3ar; Egypt’s first data pricing engine for used cars, in partnership with Synapse Analytics, which is now also a partner in Carzami. With additional team experience from BMW, Mercedes, and Porsche, Carzami is gearing to be an industry leader for car needs and requirements across the region.

September 5th 2022, 2:39 am

Can the Mena region be a leader in inclusive capital?

Wamda

Regie Mauricio is the research manager at the Legatum Centre for Development and Entrepreneurship at MIT.

Dina H. Sherif is the executive director of the Legatum Centre for Development and Entrepreneurship at MIT and a senior lecturer at MIT’s Sloan School of Management.

In 2009, Yahoo acquired Maktoob, an Arabic-language online services company, for $175 million. For the entrepreneurship and innovation ecosystem in the Middle East and North Africa (Mena) region at the time, this was a big deal. It ultimately became the deal that ended up seeding Souq, an Arabic-language e-commerce platform, which Amazon acquired for $650 million in 2017.

Souq's success has provided countless entrepreneurs a selling platform and inspired a spectrum of e-commerce competitors in the Mena region, such as Noon.com and Mumzworld. We share this story because Maktoob’s exit, which took place more than a decade ago, sparked a “Cambrian moment” of entrepreneurship and innovation that has continued to create value for people across the region today.

Another prime example of this is Careem, the Mena region's leading ride-hailing platform headquartered in Dubai. Since its founding in 2012, its former employees have founded over 84 companies, almost half of which were created after Careem’s $3.1 billion exit in 2019. Most of these companies operate in Mena, though a growing contingent also works in Pakistan, Germany, and the US. As with Maktoob, the overnight infusion of capital is already accelerating the region’s entrepreneurship and innovation ecosystem. In fact, one of Careem’s former employees founded Swvl, a ride-hailing company that went public on the NASDAQ via a SPAC.

Moving on to Egypt, a consortium of investors acquired Fawry, an Egypt-based e-payment and financial services platform, for $100 million in 2015. The company is now the country’s first fintech company to be valued at $1 billion. In 2020, Mohamed Okasha, Fawry’s co-founder and former managing director, stepped down from his role and used the exit to found Disruptech, a $20 million fintech-focused fund in Egypt. The fund invested in three companies within its first month of establishment and is currently completing its seventh investment.

Some refer to these networks of ex-employees turned founders and investors as a “mafia” because they resemble an archetype: the “PayPal Mafia.” eBay acquired PayPal in 2002, and the exit made a handful of people very wealthy. The group of ex-PayPal employees has become infamous for giving rise to billionaires like Peter Thiel, Elon Musk, and Max Levchin. The PayPal Mafia has become a core part of the Silicon Valley ecosystem. Its founders started new industries, created startup culture, and continue to fund some of the most profitable businesses in tech.

Halfway across the world, ex-unicorn employees are also defining the startup ecosystem in Mena. The question for us in the region is: how can we make sure we move beyond a “mafia,” which lends itself to exclusivity, to something that is truly inclusive?

When exits become working capital for new innovation

When eBay acquired PayPal in 2002 for $1.5 billion, hundreds of the company’s employees became overnight millionaires. Ex-PayPal employees went on to found YouTube, Yelp, and LinkedIn as well as some of Silicon Valley's most successful venture capital (VC) funds, including The Founders Fund, Clarium Capital, and Sequoia Capital.

Similarly, Yahoo’s acquisition of Maktoob in 2009 seeded the initial $5-6 million investment in Souq. As this new company grew into the preeminent e-commerce platform in the region, the merchants on Souq increased their sales from a few dozen products a week to turnover topping millions of dollars a year. Souq’s down-market impact continues to grow after its $650 million acquisition by Amazon, which aims to expand the retailer’s reach to merchants and customers across the region.

Careem’s $3.1 billion exit also created immense wealth for the company’s founders and employees. At the time of acquisition, all of the platform’s 4,000 employees held shares in the company. Overnight, Uber’s buyout made 200 employees UAE dirham millionaires and 75 USD millionaires. The sudden infusion of capital seeded the founding of 84 startups and a VC fund.

Maktoob, Souq, and Careem’s exits have built a base infrastructure for the Mena entrepreneurship ecosystem to grow for decades to come. Newer unicorns have been able to find funding and scale faster because of the networks built by these earlier deals — a value cycle that only continues to grow. 

When capital stays exclusive

Although PayPal employees went their separate ways professionally in the years following the acquisition, this group of colleagues continued to be one another's thought partners, guinea pigs, first investors, and peer mentors. The PayPal Mafia continued to exchange ideas and work together. Their partnerships are now at the core of many of Silicon Valley’s great success stories. For example, David Sacks, ex-COO of PayPal, made it a habit of investing in his former colleagues. He was one of the earliest investors in Elon Musk’s SpaceX and The Boring Company and held shares in Max Levchin’s Affirm and Peter Thiel’s Palantir. This group of innovators shared the ideas and capital that made them some of the most successful entrepreneurs in Silicon Valley. This group, however, has remained exclusive at a time when inclusivity is needed most.

Ex-Careem employees also continue to be one another’s best asset. They are one another’s best resource for workshopping ideas, recruiting talent, and raising capital. Mohamed Aboulnaga, ex-regional director of Careem Egypt, took 10 ex-Careem team members with him when founding Halan, a ride-hailing app. Moreover, many of Careem's initial investors are intent on continuing to back Careem alumni.

Ecosystems mature as successful entrepreneurs continue to share ideas and innovate. The companies mentioned above have all built communities of support that have seeded ecosystems where they reside. In a Covid-19 world, the question remains — can we build ecosystems that are more resilient and that make systems that work for everyone and not just the few who had the privilege of being a part of a unicorn?

Marks of success and cautionary tales

The PayPal Mafia, although successful, serves as a cautionary tale for the Mena region as we begin to see similar trends emerge. The group has been criticised as an exclusive boy's club.

Though still in its early days, the communities emerging from companies like Souq and Careem are more inclusive than PayPal’s. Women hold influential positions in the region’s unicorns, and contemporary unicorns are much more concerned with the societal impact that their companies are having. Tackling issues of social and economic inequality is unavoidable for a company operating in the Arab region. Employees who have graduated from some of these leading companies in the region are founding businesses in affordable education, accessible health care, social commerce, and financial inclusion. These new innovations have the potential to contribute to more inclusive prosperity in the region.  

The Middle East can become a leader in building out more inclusive entrepreneurship and innovation ecosystems through the following:

  1. New entrepreneurship pipelines: Unicorns should play a key role in creating the pipeline for entrepreneurs of all backgrounds to succeed. As ex-employees often become founders, enacting proactive hiring policies that source a diverse talent pool can mint a new generation of entrepreneurs that hail from a diversity of backgrounds that are rooted in solving the problems of communities often unrepresented by startup culture.
  2. Sharing knowledge: Successful entrepreneurship communities should not keep their expertise and experience locked up in their networks. In particular, they should extend their reach beyond urban centres and enable scalable problem-solving throughout the region. They can create programmes to build capacity and generate thought-leadership to advocate for supporting a more inclusive ecosystem of entrepreneurs.
  3. Inclusive capital: Investors should commit to funding companies outside of a handful of serial founders. These funds should source founders of all genders, races, and urban/rural backgrounds to spark entrepreneurship communities throughout the region and not just in a few mega-city epicentres. Exits can seed ecosystems, and risk capital can make sure that these exits do not make capital exclusive, but inclusive.

Mena has an opportunity. The region can seize the Cambrian moment that it is in to create an inclusive environment that accelerates value creation for all or begin locking up the doors and keeping its wealth in the hands of a few.

This article was originally published by the Middle East Institute

September 4th 2022, 10:32 pm

KarmSolar announces new minority stake round

Wamda

Press release:

KarmSolar, Egypt's leading private power utility and solar energy company, has initiated a round of capital increase to fund its local and regional expansion plans. US-based Synergy Consulting supports the new investment round as the sell-side advisor. The capital injection will support existing power generation and distribution businesses, as well as enable new business verticals such as solar water desalination solutions provider KarmWater, and electric mobility venture KarmCharge to flourish.

This comes in line with the evolution of the solar energy sector in Egypt, especially with KarmSolar’s long-term strategy to disrupt the existing utility business by developing a vertically integrated multi-utility platform with a specialization in solar power generation, as well as urban and regional power distribution.

Ahmed Zahran, CEO and co-founder of KarmSolar said: “Through the minority stake sale, we are seeking a new partner to join KarmSolar’s current shareholders and its strategic shareholder, EDF Renouvelables, in supporting the next stage of our journey. These are exciting times for the future of smart, connected utility platforms and we plan to be at the forefront of this paradigm shift in our region”.

Named by the Financial Times as one of the fastest growing companies in Egypt and 19th in Africa in 2022, KarmSolar has a strong presence across the energy value-chain from development, and generation until the distribution of power to consumers. Today the company holds a portfolio of 42 MW of secured and financed generation assets (of which 30 MW are operational) & 48 MVA of contracted distribution power capacity in the industrial, commercial, agricultural and tourism sectors (of which 12 MVA are operational).

Earlier this year, KarmSolar signed a 22 MW power distribution agreement with MARAKEZ, one of Egypt’s leading mixed-use real estate developers, for D5M, in its new mall in East Cairo. It also became the first private company to receive a permit to distribute electricity in the North Marsa Alam region by EgyptERA, signing agreements with eight resorts to join the Marsa Alam Solar grid.

September 4th 2022, 7:47 pm

Edtech Emonovo raises bridge round to grow its platform matching students with universities

Wamda

Press release 

Emonovo (formerly MARJ3), the MENA region’s leading Ed-tech platform, has successfully raised an undisclosed bridge round by strategic angel investors from US, Europe, and MENA and follow-on investment from Flat6Labs. 

Emonovo (Formerly MARJ3) is the MENA region’s leading Ed-tech platform that utilizes technology and data to match MENA youth to the best-fit majors and universities worldwide. The participating angel investors compile extensive working experience in giant companies like META, Klarna, Alan, as well as prominent VC and Private Funds while having distinguished backgrounds in EdTech, FinTech, HR, and investment sectors.

“Flat6Labs has been a firm believer in Emonovo’s team and platform from day one. This investment is a testament to our belief in Emonovo’s mission to empower students in the MENA region in their educational journey. We’re excited to see how the team will develop their platform even further and support more potential students towards fulfilling their educational ambitions in the best universities around the world,” said Dina El-Shenoufy, Chief Investment Officer of Flat6Labs.

“I am a firm believer in the power of education to transform people’s lives, and I’m super excited to be backing the team behind Emonovo,” said Willie Elamien, an angel investor.

This investment is aimed to boost the new brand strategy and fuel the growth of university onboarding & student recruitment through the platform. It will also be used to update the platform technology to optimize matching and data management.

“As a proponent of tech and social impact, I’m delighted to invest in Emonovo, the future of higher education in the region,” said Rama A. Chakaki, an angel investor.

Marj3 platform was founded by Abdo Samy, Sami Al-Ahmad, and Ahmed Elgebaly in July 2016 as a comprehensive database containing educational opportunities worldwide for Arab youth in a simplified way. In 2017, within less than a year after its establishment, the platform obtained pre-seed funding from Flat6Labs’ FAC Egypt Fund, which enabled them to grow and reach a far larger segment of the target audience in the Middle East, achieving more than two million monthly visitors on Marj3’s website.

In 2020, as they continued to grow, they managed to obtain a new investment round from a US-based investor (Expert Dojo), synchronizing with the launch of Marj3 education services to help students in the Arab region find the best suitable universities for them worldwide. Then, after a short period, Marj3 managed to secure partnerships with more than 300 universities globally in various fields.

In 2022, the 3 co-founders decided to support students fully from A to Z in their experience to follow their educational journey. They shifted from scholarships to university and student matching arena. In March 2022, Marj3 became Emonovo with some internal and external adjustments and new branding. 

“This strategic investment round is going to help us make Emonovo available to more students than ever before. Our mission is to help students achieve their educational dream, and I am super excited that our investors are aligned with us on making our unique solutions and technology experience available for everyone soon,” said Sami Al-Ahmad - CEO & Co-Founder at Emonovo.

 

September 4th 2022, 7:45 pm

Egypt’s Zeew raises $630,000 Seed

Wamda

The enterprise software as a service (SaaS) sector is one of the rising stars of the Egyptian startup ecosystem, with more companies scaling up and piquing investor interest. 

Egypt-based e-commerce SaaS startup Zeew, has raised a $630,000 Seed round from Plug and Play, Poland Prize and a group of angel investors, bringing the total funds it has raised in the past couple of years to $1 million.

Founded by Mohamed Ghaith in 2017, Zeew lets companies launch their on-demand delivery businesses, enabling them to track and control their operations through its customisable, hyperlocal SaaS solution. Currently, Zeew is present across 100 countries, with merchants in different verticals including logistics, food and grocery, restaurants, pharmacy, etc.

The startup plans to use the newly acquired funding to grow its team to serve more customers worldwide.  

 

September 4th 2022, 7:43 pm

eFlow: The Lebanese startup teaching courses on messenger

Wamda

Online learning became a necessity during the lockdowns, and while many tools became readily available, the vast majority catered to those with good internet connectivity and access to laptops and tablets. For many students in Lebanon, the political vacuum, devastated economy and crumbling infrastructure resulted in a lack of access to education.  

So Samer Bawab and Bassel Jalaleddine alongside another partner came together in March 2020 to launch eFlow, an Arabic online learning platform suited to mobile phones thanks to its interactive chatbot that is integrated with WhatsApp and Telegram. Through eFlow's platform, courses are converted into short videos, images, and voice notes, after which learners receive messages individually through the educational chatbot and are able to reply back with text, emojis, images, videos, or voice notes. The chatbot is able to analyse a learner’s response then reply accordingly by taking into account the lesson learning objectives, the learner’s learning style, and their emotions. Eflow has worked with several international NGOs, including UNICEF and UNHCR and now has 12,000 learners on its platform, with plans to branch into English, Spanish and French. It recently won the UN-backed World Summit Awards for inclusion and empowerment.

We spoke with Samer Bawab about eFlow’s journey.

How did the idea for your edtech come about?

eFlow started its journey working in Lebanon with schools and learners across the country who were facing tremendous challenges with significant power cuts, lack of electricity, low digital capacity, and essentially no access to computers or laptops. The Lebanese government had completely abandoned the educational system which left it up to the NGOs and private organisations to serve these communities of schools, teachers, and learners who were struggling. Covid-19 and lockdown aside, many teachers were relying heavily on WhatsApp and more specifically WhatsApp groups where they were sending lessons and materials.  

An organisation called Near East Foundation came to us to provide learners in marginalised communities with an online learning platform. So, we helped them build a specific tool that was essentially a chatbot to assist these learners as they were going through [course] materials online. We developed a web app and integrated it with WhatsApp and Facebook messenger. We saw very positive results.

We definitely believe there is still a big gap in the way high-quality education content is being delivered to communities around the world. Especially for those learners who are not as privileged or do not have the opportunities as their more fortunate classmates. Also, the platform can significantly save tremendous amounts of time and money for organisations that are sending field officers to gather information, as well as for teachers who are monitoring a large number of students across a big area or [across] multiple schools.

What were some of the difficulties that you faced during the early stages of eFlow’s conception?

As far as challenges go, we had a significant number of them. We were working during lockdown and the whole team was remote at the time [and] that was not an ideal environment. Here in Lebanon, we face a lot of challenges with connectivity and power. Having a connection and being able to work remotely and successfully doing client calls was a huge challenge we had to deal with and still do to this day. As a startup too, none of these organisations were familiar with our brand, so we struggled to get a few contracts signed at the beginning. However, our biggest contract was with UNICEF Lebanon, and we won a competition with them over WhatsApp. That was our big break that helped us secure a handful of contracts and other financial sponsors. Paying my team was also a quite hard, we were getting paid like $200/$300 a month. We weren't getting much money at the time, and it was quite tough to make ends meet until we could get some secure clients to pay us. 

[When] the pandemic was a bit under control with the roll out of vaccinations, we thought our progress would stall, however, what we saw was people’s interests to adopt the hybrid mode of learning. In the case of Lebanon, insurgents can block the roads and kids cannot go to school so having an online, hybrid mode of schooling becomes the solution. And I think eFlow has been very helpful in that regard. 

What are some of the mistakes that you wished you had not made during the establishment of eFlow? 

First off, the UNHCR project was huge. We knew we were getting into a big beast of a company when we were working with them, and I think the mistake we may have made was we didn't staff enough people and we didn't expect the project to be as big, especially as a startup with only 13 people or 12 people. So, for us it was really about being able to gauge the level of effort, when you have these big clients. I probably would've hired 10 more people before the start of that project instead of waiting for us to hit a brick wall. 

How is life as an entrepreneur in Lebanon today?

There’s a lot happening in Lebanon. The economy has crashed, the currency is devalued. And if you are looking to get a partner in the GCC, or even in the UK or in, in Europe or America, the clients are usually willing to pay less. They'll say, “we're going to pay you in dollars, but we're going to pay you half the amount because we know what's going on in the country right now and we want to mitigate the risks of any losses after investing. You should be glad we are making this investment in the first place because you are already struggling”. This makes it tougher for the entrepreneur who's trying to get a deal in a big project outside of Lebanon. There's this stigma now of Lebanon and people think they can take advantage of Lebanese resources that are coming out of the country because they're desperate. However, there's a lot of smart, hardworking entrepreneurs that are trying to make it so it creates this imbalance where investors think they can take advantage of Lebanese labour.

Have you noticed any changes in investment trends in edtech?

Since the start of the Covid-19 pandemic, my team and I have seen a significant uptick in investment trends focused on education technology, specifically due to the fact that many schools, learning centres and universities around the world shut down completely. This created a high demand in the market for full remote learning management systems, chatbots, and other mobile learning platforms as these educational organisations needed to find effective ways to support their teachers and students. This fuelled a big wave of funding from VCs and investors from all around the world who were seeking to generate profits from this unusual time in the world. 

Even now in 2022, as we return slowly back to normal around the world, there is still high interest for technology solutions that can be utilised in hybrid learning models and to further enhance the learning experience. Furthermore, the investments we are seeing now are going to solutions and services companies that have a large user base, and that are creating impact and value for those users even after the lockdowns. 

September 4th 2022, 7:43 pm

Stake raises $8 million pre-Series A round

Wamda

Press release:

Dubai-based digital real estate investment platform, Stake, secured over $8 million in an oversubscribed pre-Series A funding round. This follows a $4 million Seed round the company closed back in June 2021, bringing their total raised funds to over $12 million.

Backed by some of the region’s leading venture capital investors, MEVP and BY Ventures, and participation from returning investors Vivium Holding and Combined Growth Real Estate, the funding marks the largest capital raise by a real estate investment platform in the MENA region.

With a base of 42,000 users from over 80 countries and 150 nationalities, Stake plans to invest this new capital in advancing its product and technology, upscaling its brand, and expanding operations within the region with the vision of enabling a borderless, liquid, and accessible market for quality real estate investments.

The company expects to continue fueling growth in the platform as regional investors flock to real estate for stability in today’s volatile global markets. This has led Stake to register an average 17% monthly growth rate in both investors and Assets Under Management (AUM), and 500% overall growth in AUMs in the past 12 months alone.

Rami Tabbara, Manar Mahmassani, and Ricardo Brizido, co-founders of Stake commented: “Investors in the region and beyond deserve a more transparent, digital-friendly means of investing in real estate. This round is a testament to our mission at Stake to bring access and liquidity to the oldest, largest, and most sought-after asset class in the world. The proceeds will allow us to continue attracting the best talent to the team and cement Stake’s position as the category leader in the MENA region.”

The region’s real estate surge has motivated Stake to enter two more markets by Q1 2023: Saudi Arabia and Egypt. The startup aims to direct the Kingdom’s proactive investors and encourage young Egyptians to tap into the rapidly growing asset class created in their domestic markets.  

Currently, at 30+ team members, Stake is gearing towards recruiting new talent and doubling the team size in its expansion markets. The startup will provide investors with more liquidity and democratize the real estate asset class, as the region calls for a better real estate investment journey for its population of over 400 million, saving upwards of US$500 billion a year.

Riyad Abou Jaoudeh, Partner at MEVP says, "We believe that the future of property investment is digital, fractional, and hassle-free. The team at Stake has enabled thousands to become real estate investors and we are excited to partner with them as they scale in MENA.”

Despite global tensions and rising inflation concerns in the region, UAE’s real estate market continues to thrive, with Q2 2022 witnessing the highest quarterly volume of sales and 22.5K+ transactions taking place, valued at US$16.1 billion. As such, the real estate industry emerges as one of the top five sub-sectors by deal value in the Middle East, ranked alongside consumer products, banking and capital markets, asset management, and transportation.

Abdallah Yafi, Founder and Managing Partner at BY Ventures added, “We are delighted to welcome Stake to the BY portfolio and to be partnering with such an incredible team led by Rami, Manar and Ricardo in their mission-driven journey to build the go-to platform for fractional real estate investing in MENA. We’re proud of their early success in the UAE and excited about the potential in the wider MENA region. We strongly believe in the execution capabilities of the Stake team and their ability to build a dominant business while focusing on delivering profitable growth.”

Stake has grown from strength to strength since launching the Middle East’s first mobile application for fractional real estate investing in March 2022. On a mission to empower everyone to own and build wealth through real estate, Stake aims to multiply its active investor base tenfold, becoming the category leader in KSA and UAE.

Elie Khouri, Founder of Vivium Holding, further commented, "We believe that property investment stands at the core of any wealth-building strategy and we continue to stand behind Stake as they are democratizing real estate ownership across the region.”

September 4th 2022, 7:43 pm

Why is Grubtech shifting its focus to Egypt?

Wamda

The foodtech space remains one of the most dynamic in the Middle East, thanks to the region’s insatiable appetite for food delivery and eating out. Last year, foodtech startups across Mena raised over $896 million, about 28 per cent of the $3.17 billion raised in total. These startups ranged from cloud kitchens and food ordering platforms to POS systems.

While diners have embraced eating out since the end of lockdowns, food delivery has not waned. This has sparked demand for all-in-one software solutions from restaurant operators, to allow for quick updates based on the business' changing needs.

One startup offering such a solution is Grubtech, founded by Mohamed Al Fayed, Mohamed Hamedi and Omar Rifai, in 2019 as cloud kitchens were beginning to take hold in the UAE in particular. Grubtech’s solution focuses solely on fulfilling the needs of delivery-oriented virtual and hybrid restaurants, offering a full suite of end-to-end services such as software, third party integration and payment solutions. The technology offered by Grubtech cuts across several touchpoints in the supply chain, helping restaurant owners better manage their inventory, reduce wastage and increase labour utilisation. It claims that its solution helps expedite the order delivery cycle by 25 per cent, saving its clients up to 15 per cent of their gross payroll.

Grubtech currently serves customers in 18 countries across different regions, with the GCC being its biggest market. Earlier in May, the company expanded to Egypt, and relocated its entire back office functions to Cairo to serve its clients from all over the world. This came a year after it raised a $13 million Seed round.

"We had tremendous success in Pakistan, a country that operates very much like the Egyptian market. We're taking this knowledge, packaging it and localising it to the local market. We have a dedicated team that educates the restaurant community from [a] technology perspective and we work constantly on pricing and bundling our product in a way that makes it attractive for the restaurants to adopt," says Al Fayed.

But it is not just the market opportunity in Egypt that has driven Grubtech’s pivot to the country. The main reason is gaining access to a wider pool of talent.

“[Egypt] boasts abundant yet affordable talent, which can otherwise be difficult to find in the GCC, especially amid the current push towards nationalisation of the workforce adopted by governments across the region," says Osama Harfoush, country manager at Grubtech 

Grubtech is the second regionally-based restaurant-focused SaaS startup to expand to Egypt after Saudi Arabia-based Foodics, which announced its foray into the Egyptian market back in 2020.

Online versus offline food delivery 

Given the majority of food delivery orders in Egypt are placed through offline channels, the potential of e-commerce in the food delivery market remains largely untapped. Riding on the opportunity, Grubtech looks to win over restaurants seeking to expand their delivery footprint as well as bring about the parity between online and offline delivery.

"Around 80 per cent of the food consumed in Egypt is coming from deliveries placed offline. [We] firmly believe that consumer behaviour is going to change and shift to digital versus analogue, as it happens in a large market like Egypt where we estimate our addressable market is more than 40,000 restaurants," says Al Fayed.

Our initial stages of discovery showed that the large restaurants that we are targeting are using a very archaic technology, which causes a dent in their entire operations. The large multi-channel brands have exasperated challenges because they use central kitchens and stores for deliveries. We have a full team that trains the restaurants on not just the technology, but how to use the technology effectively in their operations," he further adds.

The offline-to-online conversion rates have been on an upwards trend thanks to a surge in popularity and use of food aggregators and a rise in digital payments options.

Despite being a "winner takes it all'' market, the food delivery sector has long been on the radar of global players. Turkey-based q-commerce and courier services provider Getir and UK-based online delivery platform Deliveroo, had reportedly made plans to enter the Egyptian market, but these plans were shelved due to the ongoing economic crisis, perhaps indefinitely.

"[Food aggregators] are going to educate and improve the customer experience on the mobile digital channel to shift from calling the number of the restaurant to order and placing it directly on the application. Sometimes, brands are not willing to collaborate with food aggregators and lean on third-party logistics for delivery. We help them do that through our automated solution. In general, local brands are increasingly becoming aware of the significance of having a robust digital presence, " Harfoush elucidates.

While the demand is mostly seen in the big cities of Cairo and Alexanderia, the online food delivery services are increasingly taking hold in the smaller cities of Egypt. From there, the cloud kitchens serve a huge role in enabling restaurant owners to roll out into new geographies without incurring the hefty expenses of setup. 

The change in consumer behaviour and the brand owners' growing need to switch to more digital ways of communications are key factors facilitating Grubtech’s smooth market entry.

"The cloud kitchens segment is gaining ground among local brands, and it is growing at least at a convincing pace. Unlike in the past, the market now boasts a handful of cloud kitchen operators, owing to the obvious pumped up demand for delivery services," Harfoush adds.

September 4th 2022, 7:43 pm

CarLogik raises $272,000 pre-Seed round

Wamda

Press release:

Dubai-based autotech startup, CarLogik, has raised AED 1 million in a Pre-Seed round funded by angel investors. Founded by Ali Omari and Wael Sasso and launched in March 2022, the start-up is on a mission to simplify and streamline the aftermarket auto service industry. The team will use the newly acquired funding to expand the startup’s footprint throughout the UAE, enhance its product line-up, and utilize data-driven marketing to grow its customer base.

CarLogik.com is an auto repair and service marketplace serving both sides of the industry - car owners and auto repair workshops. As it stands, the aftermarket auto service industry, is traditional, analogue and suffers from a ‘bad reputation in terms of trust, pricing and transparency. The common problem faced by a lot of out-of-warranty car owners is the struggle to find an agency alternative service provider that is trustworthy, convenient and reasonably priced. CarLogik closes this trust gap, by being a customer-centric online booking marketplace empowering car owners to take control of their car-related maintenance and repair needs in a hassle-free way.

The start-up gives customers the ability to book services or repairs with top-rated workshops through a simplified online process. Once a customer enters their car details and selects the needed services, the platform will indicate the exact checks and parts required, based on the vehicle manufacturer's recommendations, and propose a list of workshops organized by live prices, specializations, availabilities, and ratings.  As for the workshops, the platform is a digital solution offering online visibility to promote their services, allows them to utilize a booking and scheduling system, approve new jobs, issue quotations and accept digital payments.

When asked “What drives the company?”, the team stressed their desire to build a solution that, leveraging innovations, empowers customers to effectively shop and book a car service, as they would shop for their next meal on Deliveroo. While at the same time improving workshops’ economics. A win-win solution for both sides of the marketplace.

At this stage of the startup’s growth, the team is working toward educating customers and changing their perceptions of how the auto repair industry operates while establishing a trustworthy brand name in the UAE.

September 4th 2022, 7:43 pm

Talpods: Mentoring a new generation of software engineers

Wamda

Ask any entrepreneur what the most important element is to their survival and success and the answer almost always will be ‘talent’. 

Hiring the right team is crucial, not only to build the products and services, but to build the business too. Commonly among tech-led startups, it is the technology itself that is the product and so hiring the right software engineers to build the technology is essential. 

But software engineers are scarce in many parts of the region. A recent report published by The Institution of Engineering and Technology highlighted the lack of engineers in the UAE, while the quality of new recruits is also lacking, with 58 per cent of large companies saying they are struggling to find applicants with the right technical skills. 

Most startups based in the GCC turn to Egypt, Jordan, Eastern Europe or Asia to recruit software engineers, but hiring remotely carries with it its own set of challenges and risks. 

This dearth of talent encouraged Ameer Jawad and Lijeesh Majeed to co-found Talpods in January 2021 at a time when investment in the region’s startups was on the rise. 

“We noticed the shortage in high quality tech talent became more of a problem during the height of the pandemic. The right way to solve a supply shortage problem is to introduce new supply so we invest in young engineers and make them immediately effective,” says Jawad. 

Talpods initially started as an online bootcamp which lasted three months, targeting young graduates with a strong foundation in data structures and algorithms.

"What we are doing is finding those rough diamonds, carefully polishing them and then hand-holding them into tech roles with VC-backed startups in the region. With intense mentoring and support, we are able to turn these young people into highly productive engineers.”

While demand for such talent has always been high, Jawad claims that the need is now “exploding” given the rapid growth of the region’s startup sector over the past couple of years. It can take months to recruit a software engineer, with good talent commonly poached by startups with larger pockets. 

"’People’ is the fuel of startups, yet our tech scene is growing faster than the availability of talent,” he explains. "We're betting our money on the young and creative minds and we're nurturing them in order to continue fueling that exciting growth".

Talpods developed its model from a bootcamp to one that includes a mentorship scheme, pairing a full time junior engineer who has undergone the three-month training, with a “Talpod lead”, an experienced engineer with a minimum of eight years experience. This phase of the Talpod journey lasts 12-18 months, which enhances the execution of the junior engineer to mid and senior level standards.

"These mentors are senior and lead engineers who are experts in their tech stack, and they also have a passion for nurturing the next generation of world class engineers," says Jawad. "They roll up their sleeves and show them the ropes, indulging in pair programming and code reviews, helping them to navigate complex problems and execute with speed and quality, and they mentor them through office-place challenges like dealing with pressure and stakeholder management."

To date, Talpods has worked with several startups in the region, who pay a monthly fee to host these junior engineers. Among its clients is Kuwait-based online flowers and gifting platform Floward, whose chief technology officer, Diyaa Hamza, claims the service saves both time and effort when it comes to training new engineers. 

"One of our main challenges was hiring and investing in junior engineers because that will require a lot of time and dedication from our senior engineers to help guide them, which will lead to a major slowdown in our roadmap execution. Something we can’t afford to do,” says Hamza.  

Startups, particularly those in the growth stages, require tech talent with the ability to keep up with the pace of change. 

"Startups, because of their fast growth nature, usually come with complex legacy code, probably with little to no documentation, all the while still moving at an incredible pace. That level of speed and engineering is a tough environment for inexperienced talent to work in without substantial support, and they will struggle to cope with the pressure or make an impact without weighing the team down," says Jawad.

Another challenge facing the majority of startups, particularly those based in the GCC, is the cost of tech talent. The salary of a good engineer with three to five years experience will on average be Dh25,000 in the UAE, whereas an engineer with the same level of experience and talent in North Africa will cost Dh10-15,000 per month. Talpods typically trains engineers in Egypt and Lebanon, providing the startups who hire them well-trained and vetted talent. 

"It’s a sustainable social impact model where everyone wins. Right now we're creating prosperous tech careers for talent in Egypt and Lebanon, and we want to propagate this opportunity across other developing communities. They pay nothing to enter the programme because we want to make it totally accessible for them, and once they're placed they earn at the top bracket of what they expect in their home country."

Talpods-trained engineers are typically paid a $750 monthly salary during their mentorship phase. After completing their training, their salary could double according to Jawad.

"Our vision is for our region to be a self-sufficient tech hub, one with its own pool of high quality talent who are home-grown and a stronger fit culturally than traditional outsourcing routes in foreign tech hubs. Our young population here offers us an abundant source of ambitious talent who have the potential to fill that gap, and we’re playing the role of turning that potential into a reality," he adds. 

What makes a successful engineer?

Good engineers have a strong technical foundation alongside soft skills, but according to Jawad, exceptional engineers embrace the following principles:

1 - Growth mindset - it’s a certain kind of talent who are hungry for challenges and persevere in the face of hardship. Their success is the result of learning from many failures, and they embrace feedback and criticism as an opportunity for learning and growth.

2 - Ownership - great engineers own the role they take on - they take ownership not only of their individual role, but they are mission-aligned and take accountability in the collective goal that their organisation wants to achieve. 

3 - Agile thinking - a firm belief in industry values and best practices such as Design Thinking and Extreme Programming that result in the more efficient mode of delivery, maximising productivity and minimising errors."

September 4th 2022, 7:43 pm

Egypt’s mental health startup Shezlong expands to South Africa

Wamda

Press release 

As part of its strategic expansion plan abroad, the Egyptian startup Shezlong, the first and largest psychotherapy platform in the MENA region, announced the launch of its business in South Africa under the name of “Upright”.

Due to the mental health crisis in South Africa, Shezlong felt it was its duty to step up and provide them with the help they need. Shezlong chose this country specifically as a lot of research called attention to its need for mental healthcare services and more specifically, e-mental healthcare.

Expanding to South Africa would help reach marginalized populations who are underserved by the health system and are suffering from various mental health issues that are significantly affecting their quality of life.

The people of South Africa are exposed to various incidents that affect their mental health significantly such as a high rate of gender-based violence, lack of adequate care during pregnancy and unemployment, among many other factors.

Shezlong constructed a dedicated website and application with the brand identity of Upright. This is just a stepping stone to its larger goal, which is to make mental healthcare available and accessible to each person on this planet as everyone deserves to have the best quality of life possible.

Shezlong believes in its mission, and surely, it will achieve it one day. it truly believes in the necessity of mental healthcare, which is why they are starting with the most underserved population and countries.

“We are proceeding according to a clear strategy and a firm vision towards expansion and growth. We are aiming to make mental wellness a daily routine for every individual in Africa to help build resilient communities, hence, induce a positive impact on the welfare of the society through innovative, accessible and easy to use technologies. ” Mohamed Alaa the CEO of Shezlong said.

 

 

September 4th 2022, 7:43 pm

Aramco’s Wa’ed Ventures co-invests €13 million Series A round in OQ Technology

Wamda

Press release:

OQ Technology, a global 5G IoT (Internet of Things) satellite operator, has closed a €13 million Series A funding round led by Wa’ed Ventures, the venture capital arm of Aramco, and Phaistos Investment Fund, managed by 5G Ventures in Greece.

OQ Technology will use the funds to grow its 5G IoT satellite constellation, further develop its proprietary technologies and acquire more licenses. OQ’s technology enables applications requiring fast and real-time data processing in remote and rural areas via small satellites in low Earth orbit (LEO). 

Earlier this year, OQ Technology launched its third satellite mission, Tiger-3, aboard the SpaceX Falcon 9 rideshare mission Transporter-4. The company has more planned satellites that will be launched soon to further grow its constellation. 

“Against a challenging economic backdrop, our decision to seek funding was rewarded with a raise that will help us achieve our immediate goals in terms of growth, expansion into the Middle East, Africa, Asia, South America, and Oceania, increasing our spectrum licenses and patents portfolio, and further our product development,” said Omar Qaise, founder and CEO of OQ Technology.

“We have pioneered satellite-based 5G communications with the world’s first universal IoT device that can provide connectivity using satellite in low Earth orbit (LEO) and other patented technologies.  Since 2019, we had many successful missions with more in the pipeline, and we had successful service demos with Global Fortune 500 companies. This investment is a testament to the strength of our business plans, capabilities, and technology that OQ has been implementing since its inception, and a clear differentiator from many other satellite IoT companies.” 

Fahad Alidi, Managing Director and CEO at Wa’ed Ventures has commented; “Our investment in OQ Technology, a global pioneer in satellite technology, is the true manifestation of our mission to position the Kingdom as the centre of gravity for global tech ventures.” He added, “we envision OQ to become the nucleus to building a full spacetech ecosystem that starts with the Kingdom and outspreads to the surrounding region.” 

5G Ventures CEO Antonis Tzortzakakis said: "We consider there is great potential for 5G IoT technology, and we are very excited to invest in OQ Technology, together with Aramco's Wa'ed Ventures. The investment fits perfectly in 5G Ventures' strategy for supporting innovative 5G-related technologies that are capable of creating value and contributing to the evolution of an ecosystem of innovation in Greece," 

As part of OQ’s expansion strategy, OQ Technology is in the process of establishing two global subsidiaries, one in Saudi Arabia, the first of its kind in the Kingdom and the only 5G space network operations centre in the MENA region, and one in Greece under the name ‘OQ Technology Hellas’. 

The Saudi subsidiary, headquartered in Al Khobar, will host one of the largest data and network operations centres in the Middle East for 5G satellite services and will pioneer many of the business engagements with large oil and gas companies in the region. The centre will develop new products to engage with the local industrial ecosystem and universities in line with Saudi Arabia’s space initiatives as part of Vision 2030. 

According to GSMA Intelligence report published this year, the global direct-to-satellite (D2D) market is growing at a fast rate with 3GPP standardized technology offering access to new revenue for telcos, which will be worth over $30 billion by 2035.

September 4th 2022, 7:43 pm

Bahrain’s Faceki raises undisclosed Seed round from Tenmou

Wamda

Source: Startup MGZN

Tenmou, Bahrain’s first Business Angels Company, which provides both mentorship and capital to high-potential, innovative Bahraini entrepreneurs from the seed stage, announced its investment in Faceki.

Faceki is a Bahraini startup specialising in AI-powered Digital Identity Verification, Know-Your-Customer (KYC), Digital onboarding and Biometric Facial Authentication. Serving customers from more than 110 countries worldwide. Focusing on simplifying users’ journeys and fighting fraud to create safer, more accessible user experiences. 

The platform uses AI and machine learning to power its certified liveness and anti-spoofing detection technology which help verify if the users really are who they claim to be. Protecting customers and enterprises, and reducing onboarding process time and cost by up to 95%.

Tenmou emphasises the support and mentoring provided by its Angel shareholders, all of whom are established businessmen and successful entrepreneurs, whereas it has invested in 27 startups and created over $100 million in follow-on funding.

The company stresses that the aim of this investment is to support Bahrain’s goal to be the leading digital economy in the region.

Commenting on this occasion, Tenmou CEO Mr Nawaf Al Kooheji, said: “We’re very proud in investing in local AI platform that allows many other startups and even government entities to stop relying on different devices to provide biometric solutions to customers.”

“Faceki unifies user experience cross-devices and cross-platform capabilities. It ensures a smooth user experience over the board. We in Tenmou, encourage all AI startups which follow Bahrain’s plans for digital transformation, regulatory framework, and digital infrastructure development.”

He noted that Bahrain has created a digital ecosystem that makes business more efficient and competitive, with the essential support for a smooth digital transformation at the national level.

Mr Al Kooheji pointed out the Kingdom ranked 4th in the Arab digital economy report 2020 and ranked 3rd among Arab states and 40th globally in the 2021 “Heritage” index of economic freedom and it is now the leading country in the region in financial technology fintech.

“We aspire to provide a more convenient and frictionless verification solution to help make customer onboarding experience simple, safe and more secure.” Said Hamza Al-Ghatam, Co-founder and CEO of FACEKI. “We are delighted to have Tenmou as an investor and a partner, with the aim to help us accelerate technology innovation, and reach new markets globally.”

It is worth noting that Faceki has won Globee Excellence Award for Artificial Intelligence Award in Security this year.

August 7th 2022, 7:33 am

Procurified raises $1.1 million Seed funding

Wamda

Press release:

Dubai-based construction bid management platform Procurified has raised $ 1.1 million for its Seed Round. The Round was led by DIFC-based Aditum Investment Management, with participation from US-based Signal Peak Ventures, Al Hathboor Group, Empede Capital and strategic Angels. 

“We are thrilled to partner with the great team at Procurified. Rupert and Marc are solving a very challenging problem in a big market. The Founders’ insight into these challenges is reflected in their product design and business model with a hyper-focus on reducing friction for customers to adopt and a very short ‘time to value’ from adoption,” Lachlan Hughes of Aditum commented.

Procurified connects Buyers to their vendors to automate a very manual excel and PDF-reliant process of project bidding. “We are delighted to have closed our seed round with really great Investors. Our priority now is to establish an awesome team so we are hiring for key roles in product, engineering and sales. We are excited about our ambitious growth trajectory, with our Series A Round in the next 12-18 months,” said Rupert Tait, co-founder. 

August 6th 2022, 3:31 pm

Mena startups raised $105 million in July, lowest amount so far in 2022

Wamda

Startups in the Middle East and North Africa (Mena) raised $105 million across 44 deals in July 2022, marking a significant slowdown in investments so far this year. In terms of investment value, this is a drop of 84 per cent year-on-year and a 68 per cent drop month-on-month. Even without Kitopi’s record-breaking $415 million Series C round announced in July last year, the amount raised last month fell by more than 50 per cent. 

The number of deals fell by almost a third when compared to June  and has halved when compared to July 2021. Investment announcements typically fall during the summer months, but it seems like this slowdown is reflective of wider global trends that have impacted investor sentiment. Investment in startups worldwide fell by 23 per cent in the second quarter this year, according to CB Insights due to growing economic uncertainty and a decline in tech stocks. 

Most of the investment in July was concentrated in the fintech sector thanks to UAE-based Yap’s $41 million growth round. This one deal accounted for more than half of the amount raised in the UAE alone. 

Saudi Arabia, which to date has seen investment in its startup rise steadily, saw a 55 per cent drop in investment value in July when compared to June 2022, while investments in UAE startups dropped 73 per cent. 

Egypt was the only country that saw its investments rise, with a 72 per cent increase in investment value thanks mainly to Cartona’s $12 million Series A round. 

Activity in Lebanon also picked up, due to the Energy Innovation Hub’s accelerator programme which saw 13 startups receive a grant of $12,000 each, most of them in the cleantech and sustainability sectors. Yap’s large round propelled fintech to the top of the rankings in terms of investment value with $53 million raised across eight deals. 

Just 12 of the startups that raised investment in July attracted foreign investment, of which US investors participated in eight of the deals. Regionally, Lebanon’s Innovation Hub was the most active investor in terms of number of deals, followed by UAE investors with 11 deals and then Saudi Arabia-based investors who participated in eight deals.  

Female-founded startups raised just 0.1 per cent of the $105 million, the lowest so far this year, while startups founded by men raised $95 million, or just under 91 per cent. Startups with both male and female co-founders raised $9.6 million, or 9 per cent of the total. 

Last month, six startups did not disclose the amount they raised. They include Lun Startup Studio, Modesta, Orisdi, Paymee, Sol, Stllr Network. We have assigned them a conservative amount of $100,000 each. 

These monthly reports are a collaboration between Wamda and Digital Digest.

August 6th 2022, 3:31 pm

Barakah raises $300,000 pre-Seed round

Wamda

Press release:

The KSA-based food delivery startup Barakah has secured $300,000 in a pre-Seed round from Alriyadah Investments. Alriyadah Investments is a family-owned closed real estate and energy development fund headquartered in Jeddah, Saudi Arabia. Barakah aims to harness digital innovation and social awareness to tackle food waste in restaurants, bakeries, hotels and groceries by offering a green discount on their surplus goods through an innovative mobile app in real time. It aims to help businesses drive profit and empowers them and their consumers to join the global movement against food waste.

The company shared that their motivation for starting Barakah was centred around sustainability and tackling the global and systemic issue of food waste in their own backyard. 40% of all food is wasted, in monetary terms, this amounts to $1.2 trillion globally and SAR 40 billion in Saudi, representing 10% of the world's greenhouse gas emissions. The Islamic teachings were another major influence on the initiative, as they instilled the importance of preserving food. The word "Barakah" means blessing in Arabic.

Barakah wants to utilise technology to address a significant socio-economic issue where there is a clear gap in the market. That gap is creating the first discounted surplus marketplace in Saudi Arabia. The startup targets both businesses and consumers - for businesses they work with restaurants, bakeries, cafes, hotels, buffets, and grocery stores to put their surplus on the map. Generating an untapped source of revenue for our vendors. For consumers, the app appeals to value discerning and eco-conscious customers. 

The app introduces a real-time surplus management platform for businesses in the food service industry. Restaurants list their unsold meals on Barakah’s surplus marketplace where consumers can easily explore the map and find nearby discounted meals from their favourite shops, saving these items from going to waste.

August 3rd 2022, 3:46 pm

BNPL Tabby secures $150 million credit facility

Wamda

Press release:

Tabby, MENA’s leading payments and shopping app, has secured $150 million in debt financing from Atalaya Capital Management and existing investor Partners for Growth (PFG). 

Headquartered in New York, this facility marks Atalaya Capital Management’s first deal in the MENA region. In addition, San Francisco Bay Area-based Partners for Growth (PFG), have upsized their initial $50M commitment under the new facility. In aggregate, this represents the largest credit facility ever secured by a fintech in the GCC. Following Tabby’s Series B extension earlier this year, Tabby’s total capital raised to date amounts to $275 million.

The investment fortifies Tabby’s balance sheet and supports its sustained growth in transaction volumes and product expansion. In the last few months, major brands like H&M, Bath & Body Works, Nike, Swarovski and more have chosen Tabby as their payments partner. Tabby will continue to provide MENA’s consumers with access to credit otherwise unavailable to them, without charging any interest or other fees.

In May, Tabby announced the launch of Tabby Card, a first-of-its-kind solution in MENA tapping into 90% of the retail opportunity that happens offline.

The BNPL environment in MENA

MENA’s market dynamics make BNPL highly more relevant compared to developed markets where players continue to face challenges. In Saudi Arabia, the Arab world’s largest economy, less than 20% of the population has a credit card in comparison to over 70% of the population in the United States. The limited access to credit solutions in the Kingdom makes Tabby a much-needed solution for consumers to add more flexibility and control over their finances.  

Tabby has grown 10x in revenue, 8x in active customers and 3x in active retailer partners in the first half of 2022, compared to the same period last year. Tabby continues to operate with superior economics driven by controlled risk in a market where access to credit is scarce and consumers cannot easily overextend themselves.

Hosam Arab, CEO and Co-Founder of Tabby, said: “Debt commitments from two reputable institutions is the validation of our strong track record and business model. As we near profitability, we’re in the fortunate position of not having to raise equity under the current market conditions and as such are thrilled to partner with the like-minded people at PFG and Atalaya.”

Justin Burns, Managing Director of Atalaya Capital, said: “Atalaya is excited to partner with Tabby in its mission to expand access to credit and payments in markets where there are limited existing options.”

Max Penel, Co-Head of Global Fintech at PFG, said: “We continue to be impressed by Tabby’s ongoing rapid growth whilst materially improving its' unit economics and PFG is excited to continue to support Tabby through an upsize of our existing facility."

August 3rd 2022, 6:34 am

SWVL suspends $100 million acquisition of UK’s Zeelo

Wamda

 

Dubai-headquartered transport and mobility solutions provider SWVL, has canceled the proposed acquisition of Zeelo, a UK-based B2B smart buses operator. The deal dates back to April this year and was worth $100 million.

The company said in a statement issued on Friday that the decision came as a response to the current turmoil in the global financial markets. It also added that it previously invested a total of $5,000,000 in the said startup.

Excluding Zeelo, SWVL also acquired five global startups.The latest addition to its buying spree was Mexico-based mass mobility startup Urbvan.

Earlier in May, the Nasdaq-listed company sacked 30 per cent of its employees, as part of its plans to achieve profitability in 2023. A month later, it halted its operations in Kenya and Pakistan as well as suspended a number of routes in its home market of Egypt.

August 1st 2022, 11:56 am

All Over Group’s Khaled Al Refaai acquires 25 pre cent of Blockat for $3.6 million

Wamda

Source: Waya

All Over Group has announced that its CEO, Khaled Al Rafaai, has acquired 25% of Blockat, Kuwait’s e-commerce platform.

The deal, which accounted for $1.12m Kuwaiti dinars equivalent to $3.6m US dollars, also includes plans to list the platform on the stock exchange.

It is worth mentioning that All Over Group is a Kuwaiti media production company, while Blockat is an e-commerce platform focusing on products for kids and teenagers in specific.

“This strategic partnership between Blockat and All Over Group is considered the start of a new era for integrating E-commerce and the content industry with artistic production and advertising, with the aim of creating a unique case of artistic creativity that reflects the rapid spread and expansion of the customer base in the region.” commented Blockat via Linkedin.

 

August 1st 2022, 11:26 am

Homzmart raises $23 million pre-Series B round

Wamda

Source: Reuters

Furniture and home goods e-commerce platform Homzmart has closed one of the past year's biggest funding rounds for a Middle Eastern and North Africa start-up, raising $23 million, its chief executive said.

The company, launched in 2020, will use the new funding to expand services, especially logistics, and fill gaps that appear in supply chains, co-founder and CEO Mahmoud Ibrahim said in an interview with Reuters.

The latest pre series B round funding round, which included participation from Riyadh-based technology venture capital fund STV, Impact46, Outliers Ventures, Rise Capital and NUWA Capital, brings its total funding to about $40 million.

It raised $15 million in an earlier round that closed in the second quarter of last year, after an initial round in which it raised about $2.5 million.

Homzmart started by connecting brands and manufacturers with customers in the Arab world's most populous country. But it found gaps in supply chains that prompted it to create a logistics arm, and now has about 100 trucks.

It also in March acquired Berlin-based home interior design firm MockUp Studio, which uses artificial intelligence to make designs.

Earlier this year the company's activities expanded to Saudi Arabia, and Ibrahim said it had achieved solid growth there. "The percentage of activity in the Kingdom is now between 25% and 30% of the total volume of Homzmart business," he said in the interview on Sunday.

The company says it serves 25 million houses in Egypt and Saudi Arabia, with more than 150,000 products on the platform.

Homzmart has not yet achieved profitability but Ibrahim said it is still focused on expansion and building market share "through lazer-focused profitability milestones".

August 1st 2022, 9:41 am

Kuwait’s Teeela raises $3.75 million pre-Series A

Wamda

Press release:

Teeela, an innovative and rapidly-scaling gifting platform and app has raised $3.75 million in a pre-Series A. The round was led by Saudi Arabian investment firm Wealth Well and supported by strategic investment from Mad’a Investment Company, Al-Akeel family and other prominent investors.

The funding will fuel the growth of Teeela across the GCC, with imminent strategic expansion in the Kingdom of Saudi Arabia and the United Arab Emirates. This will strengthen Teeela’s regional presence beyond its Kuwait headquarters as it targets the Middle East’s $30 billion gifting market, including family products, children’s goods and toys.

Abdulwahab Al-Khulaifi, co-founder and CEO of Teeela said, “We are proud to receive the backing of such well-respected investors who believe in our vision to be the number one choice for family gifting experiences. There is a huge opportunity to serve the gifting market with an exceptional range of products and personalized gift-wrapping options, providing customers with unmatched speed and convenience. This funding will underpin our regional expansion, support product development and strengthen our ability to attract top regional talent to be part of our journey.”

Wealth Well CEO Aqeel Alrajhi said, “Teeela’s team is committed to delivering a unique customer experience, ranging from the app journey to various new and innovative products. Teeela is well-positioned to take advantage of the rapidly changing e-commerce market and expanding its presence across the GCC and the broader MENA region.”

Abdullah Abdulaziz Al-Othaim, CEO of Mad’a Investment Company added, “Teeela has carved a strong ecommerce niche in Kuwait which, through the right strategic partnerships and investment, can proliferate across the Middle East. The business is ideally suited to meet the high online retail expectations of GCC consumers.”

Teeela provides a large selection of thousands of toys, with customised and personalized gifting options including bespoke wrapping and last-minute ordering. With super-fast, same-day delivery and an average time from order to handover of just four hours, Teeela provides a uniquely fast and seamless experience. The business has grown rapidly from its founding team to more than 60 colleagues in just four years.

The app has proven to be very popular and successful amongst customers, with conversion rates between four to five times higher than average ecommerce marketplaces and high customer retention. Teeela is also growing its team and bringing in key regional talent as part of a recruitment phase in the second half of 2022.

August 1st 2022, 6:58 am

What is the state of open banking regulations in Mena today?

Wamda

Abdulla Almoayed is the founder and CEO of Tarabut Gateway, an open banking startup headquartered in the UAE

The tide of open banking regulation in the Middle East is rapidly evolving. In the past year, we witnessed preparatory outlines and regulatory discussions for open banking implementation. This year, the conversation continues, and implementation plans are set in motion with regulators leading the market.

Open banking’s value proposition hinges on the availability of dynamic and straightforward regulatory frameworks. Ecosystem scaling requires fintechs, banks, and third-party service providers (TPPs) to be able to interact without friction when building new products and services.

The Middle East and North Africa's (Mena) overall regulatory landscape is a picture of rapid improvement and development. The Dubai Financial Services Authority (DFSA) has introduced licences authorising the provision of account information services (AIS) and payment initiation services (PIS) activities. 

On the other hand, Saudi Arabia is putting its 2021-introduced open banking policy into practice as part of the country’s "Vision 2030" plan to optimally position the kingdom for a digitised world economy. In its endeavours to encourage open banking and fintech innovation, the Saudi Central Bank (SAMA) is leading the way, now requiring banks to open their APIs.

Outside of the GCC, open banking is increasingly high on the agenda. For example, while Egypt’s regulatory situation is not yet formalised, its central bank recently made its national payments system more versatile, paving the way for the growth of an open banking ecosystem. While Morocco has introduced bespoke payments on regulation and is working on an open banking framework. Similarly, Jordan is at the preparatory stage of open banking regulation. 

Regional powerhouses moving towards open banking: UAE and Saudi Arabia. 

In a milestone decision in April, the Dubai Financial Services Authority (DFSA) granted its very first open banking licence to Tarabut Gateway. The legitimacy and reassurance bestowed upon open banking service providers through licensing is key for collaboration among disruptors and legacy players across the financial system. 

The DFSA operates on a licensing framework enabling AIS and PIS activities ahead of final regulatory clarity. Similarly, Abu Dhabi Global Markets has contributed a licensing framework attempting to map a way forward for the emerging open banking and open finance sectors.

In keeping with the Emirates’ ambitious ‘Vision 2030’, on 28 June - the Dubai International Financial Center launched its Open Finance Lab, an exploratory incubator for open finance solutions with Tarabut Gateway as its preferred platform partner.

Meanwhile, the drafting of high-level regulation happens at the Central Bank of UAE. The federal institution is consulting with government and private entities about the extent of binding laws and the long-term regulatory environment for open banking.

Open banking in Saudi Arabia has been characterised by incredible speed when it comes to ecosystem and regulatory innovation this year. Observing and learning from the UK’s regime on open banking, SAMA has moved boldly in recent months, drawing up comprehensive fintech regulations and gearing its financial services towards innovation. An AIS and PIS licensing regime is expected very shortly.

Synergies in Saudi Arabia multiply, as the country’s ‘Vision 2030’ – aiming at the transition to a knowledge-based economy – aligns companies and state actors on innovative sector goals. The kingdom has declared its intention to achieve 70 per cent digital payment transactions by 2030, which open banking can help empower by enabling instant and direct bank to bank payments that removes frictions in the current payment journey.

For potential fintech customers, the Saudi market is compelling with a young population of underserved but tech-savvy potential users. At the start of 2022, the country counted 81 fintech startups, recording a 37 per cent increase over the course of last year.

The kingdom has already become a viable centre of peer-to-peer (P2P) lending ventures, with P2P players benefitting from novel digital banking infrastructure, e-KYC standards, and a Credit Bureau.

Bahrain as a fintech pioneer

The region’s fintech pioneer, Bahrain, has steadily grown its domestic fintech ecosystem. The Central Bank of Bahrain’s (CBB) Financial Services Development Strategy maps out the sector’s development goals between 2022 and 2026. 

June 2022 has seen implemented rules mandating financial institutions to make data available about ATM and branch locations, and domestic and international payments - another step towards an open data environment.

Having successfully nurtured regional fintech champions, Bahrain’s focus in 2022 and beyond will be to increase investments in the sector, introduce a digital version of its currency - the ‘digital dinar’ - and implement an open finance framework, the next step in the open banking’s movement.

Up and coming: Oman and Egypt

In early 2022, Oman joined its neighbours by deliberating on an open banking API strategy. The country’s roadmap plans several ecosystem accelerators including a regulatory sandbox, a cloud computing framework and an e-KYC initiative.

In light of the Gulf’s thriving fintech ecosystem and forward-looking regulatory approach, Egypt has also made notable advances. Its central bank (The CBE) is actively pushing for a national network of instantaneous payments. Since launching its InstaPay app in March 2022, a network of ten banks now support Egypt’s move towards a digitised banking system. In March, the CBE introduced a KYC project to facilitate online banking account creation, thus eliminating a crucial obstacle for wider open banking adoption.

What lies ahead for the ecosystem?

Considering the recent and ongoing developments, fintech innovators may look forward to the next step in open banking implementation across Mena. 

Examples of use cases likely to dominate the industry in 2022 include digital payments and instant cross-border payments, ‘buy now, pay later’ (BNPL), AIS & PIS products, KYC, and personalised digital banking. For instance, 21 per cent of total online payments will be made through wallets by 2024, overtaking cash on delivery transactions.  

Open Banking API infrastructure sits at the intersection of all use-cases. Tarabut Gateway empowers banks, fintechs and TPPs to build out the concrete ecosystem that forward-looking regulation has provided the safeguards for - so all boats may rise with the tide.

Open banking will not stop at transactions and payments. The first cross-sector collaborations are already underway and developing towards an open finance data sharing model, integrating telecommunications, insurance, utilities, transportation, and health.

August 1st 2022, 4:54 am

Openner launches Web3-focused Qurious Labs

Wamda

Press release:

Qurious Labs is the first Web3-focused Venture Studio model to hit the MENA market. This model serves to back bold entrepreneurs in MENA building web3 companies that utilise blockchain, digital currencies, NFTs, gaming as well as explore the Metaverse and decentralised applications leveraging. 

By combining the incentive structure of a co-founder, the resources of a development agency, and the venture fund network, Qurious Labs can work with Web3 creatives and technologists who have extremely limited resources and launch world-class products with them.

The Venture Studio is backed by Openner, a Venture Capital firm in Egypt, and is confident more VCs will realise the value of the Venture Studio model and the potential web3 has on emerging markets when it comes to utilising open protocols on the blockchain and token economics. 

As a studio, its goal is to help developing markets in accessing a global talent and capital pool while empowering people to earn and own a piece of this new internet. "We deeply believe that web3 will have the biggest impact on society and business since the introduction of the internet", says Ahmed El Wassimy, Studio Director. "Over half a million developers around the world are building the infrastructure that will shape an always-on, economically equitable future for society leveraging web3 and we're excited to embark on this journey to bridge the gap between web3 and emerging marketing in the Middle East and North Africa."

Qurious Labs has a primary goal, and that is to offer a complete ecosystem for builders to launch their web3 ventures and brands to explore web3 business models. They do so by supporting builders by being a one-stop shop for them to build and launch their web3 projects. Builders get insightful knowledge from experienced builders, thought leaders, and veteran investors to build and fund resilient communities, platforms, and economies.  

Qurious Labs is growing a network of web3 talent and expertise in many fields, from UX/UI, full-stack, content creation, community building, marketing, and game design & development, to leverage and contribute to web3 projects they work on and have 'ownership' in high-quality projects before anyone else.

"Web3 is the golden age for creators and artists," says Kareem Karam, Venture Architect at Qurious Labs, "We see the potential of Web3 as a force for good, and we are eager to work with policymakers to define a vision for how to use these powerful new tools to benefit society and ensure they realise their full potential.”

Many renowned VCs are betting big on web3 business models and gaming. After this global recession storm passes, the team at Qurious Labs believes this is when web3 will start getting most of the attention. "The old ways of raising money and growing at all costs are over with. Web3 communities and networks will motivate participants to become owners and investors in the networks they want to be a part of and help grow. This will be a whole new way of raising capital from your early believers and die-hard fans. That's the power of web3 and there’s no better time to build for it." says El Wassimy. 

Qurious Labs is focusing on venture building and venture support that will on-ramp adoption for emerging markets in MENA while delivering and capturing value with web3 communities globally. Qurious Labs hires talent from all around the world to build upon existing infrastructure and looks forward to working with partners in government, the private sector, and civil society in UAE, Saudi Arabia, and Egypt to shape what promises to be one of the most consequential conversations of our time.

"The way we coordinate, govern, and participate in networks will change the way we work and value our time with the growth of web3 and we believe that  Qurious Labs is well positioned and resourced to unlock that potential and prioritise the development of world-class, decentralized digital infrastructure for communities everywhere," says Ash Rofail, General Partner at Openner. 

July 31st 2022, 10:13 am

ChatFood raises $3 million bridge round led by Antler

Wamda

Press release:

UAE-headquartered omnichannel ordering and data-driven marketing platform, ChatFood, has announced a bridge round of $3 million led by Antler with a reserved amount for key strategic Saudi partners. Other participants in the round include family offices such as 6G Capital and existing investors such as Guillaume Pousaz’s Zinal Growth. This brings ChatFood’s funding to date to $7 million after last year's seed round led by leading regional VC funds BECO & Wamda Capital. 

The funds will be primarily applied towards setting up operations in Saudi Arabia, where the market is expected to reach over $25 billion by 2026, as well as product development with the aim to unlock further efficiencies for restaurants, bars, hotels, and entertainment venues. 

ChatFood’s co-founder and CEO, Benjamin Mouflard, shares, "We are looking forward to providing our services in Saudi Arabia as the market is set to witness phenomenal growth within the next four years, further strengthening ChatFood’s leading position in the GCC” 

ChatFood has already empowered over 3,000 hospitality venues across the Middle East to drive more than $100 million in sales and convert more than 1 million visitors into direct customers, growing at an impressive 260% YoY. ChatFood’s newly launched NFC/QR ordering system has been able to deliver outstanding results for its partners: 35% higher average spend, 3x more tips, and 25% more labour efficiency. This has allowed ChatFood to unlock revenue and margins at a time of surging food costs, labour shortages, and increasing commissions for hospitality venues. 

Christopher Dix, Global Capital Director and Head of MENAP at Antler, said: “We believe Ben and an exceptional ChatFood team are building a ubiquitous digital solution across the F&B value chain. Creating a single platform that combines digital ordering, payments, logistics, analytics, and marketing offers up an invaluable proposition.”

Further commenting, Christopher Dix said “ChatFood at its core enables F&B and hospitality operators to improve margins and run their venues more efficiently, whilst also ensuring an optimal customer experience – a mutualistic solution across the board. We believe ChatFood is the right team to build the leading omnichannel ordering and payments solution and look forward to helping them cement their MENAP leadership position against an exciting and ever-evolving regional backdrop.”

July 28th 2022, 10:52 am

Artifi raises $3.26 million in investment

Wamda

Source: Business Insider

Artfi, a Dubai-based blockchain NFT ecosystem received funds worth $3.26 million at a valuation of $100 million. Investors that participated in this round include Sheikha Hend Al Qassemi, a member of the ruling family of Sharjah; Raza Beig, director of Landmark Group, UAE among others.

Founded by art connoisseur Asif Kamal, this startup will concentrate on creating fine art NFTs. Artfi will use this capital to build a dedicated marketplace for fine art NFTs, as well as for product and team development.

“Artfi was launched with a vision to make art accessible to everyone. Each art piece that we bring and fractionalize into 5-10k NFTs will be priced at the real value of art with predefined coordinates and fraction number, unlike super inflated JPEG NFTs that is crashing badly today,” said Asif Kamal, founder and CEO of Artfi.

It is building fine arts NFTs which represent iconic blue-chip artworks of world-renowned artists like Picasso, VS Gaitonde, M F Husain, Sacha Jafri, and Banksy among others. Blue-chip artworks are made by renowned artists.

The funding comes when NFT transaction activity has declined from $3.9 billion in February 2022 to less than $1 billion in March 2022.

“This is an opportunity for people to now diversify their portfolios from stocks and fixed deposits and invest in one of the largest asset classes that have outperformed all these traditional investments for over 30 years,” said Asif Kamal, founder and CEO of Artfi.

The global art market has a total estimated global sales of $65 billion, according to Statista. The fine art fintech company is also gearing up for whitelisting of its offerings from August — which means users get guaranteed early access.

July 28th 2022, 10:52 am

Enhance Ventures launches $30 million Builders Fund

Wamda

Press release:

Enhance Ventures, the MENAPT region’s leading venture studio has announced the launch of its $30 million Builders Fund, which will invest in the company’s next set of ventures for the future of finance and commerce in the Middle East.

Through the fund, the company plans to create 5,000 high-tech jobs, produce 500 business leaders, train 50 capable founders, and be the institutional cofounder of at least 5 major exits in the region in the next 5-10 years. “As a venture studio, we support founders materially in the early stages of venture development, when they need help the most. This dramatically increases the success rate for startups, and makes entrepreneurship an economic engine for our region,” said Mohammad AlHokail, Partner in Enhance Ventures. “As a studio, we plan to expedite ecosystem development and increase activity between this ecosystem, starting with Dubai and Riyadh, and other, more developed ecosystems.”

Launched in 2016, Enhance focuses on building innovative digital businesses for the Middle East, North Africa, Pakistan and Turkey. The company is Saudi-first when it comes to launching and growing businesses, with a sizable team in Riyadh, while it has a special focus on the UAE and the rest of the GCC. It also has a technology centre in Istanbul, and satellite offices in Cairo, Amman and Beirut.

The new fund will invest exclusively in the studio’s upcoming ventures, many of which will focus on gaps in the fintech space. “Trends such as web3, open banking, the move to a cashless society, the need for frictionless consumer and SME finance, and the growth of B2B commerce have created new opportunities in the MENAPT region,” said Ritesh Tilani, Partner in Enhance Ventures. “Paired with Enhance’s venture building playbook, its proprietary collection of venture building tools, and access to top talent, we believe Enhance is uniquely positioned to continue its success.”

Enhance Ventures has long been a global pioneer in the venture studio space. Aside from its acclaimed studio white paper, Enhance also developed and maintains the Global Studio Map, the most comprehensive database of all 784 venture studios worldwide. The Enhance team also serve on the boards of the two global associations for venture studios, US-based Global Startup Studio Network, and Europe-based StudioHub.

“Acting as an institutional co-founder, we offer entrepreneurs support with our tried and tested venture building methodology, venture architects, technology development, marketing support, human resources capabilities, our talent database, seed and follow-on funding, and office space, among others,” said Alper Celen, Partner in Enhance Ventures. “This approach of shared resources allows us to take any given venture through the stages of ideation, validation, creation, growth and scale up with minimal cost and time.”

Enhance’s first venture Joi Gifts is now the region’s largest online gifting marketplace. It was successfully spun off from the studio 10 months ago when it raised its Series A funding from investors such as Knuru Capital, MENA Moonshots, Wa’ed Ventures (the venture investments arm of Saudi Aramco) and Panthera Capital (the investment arm of Fujairah Holding), among others. The business has tripled in revenue since then and is currently raising its Series B funding round.

Other portfolio companies include Right Farm, a B2B agriculture technology firm which raised its seed round of $2.8M earlier this year. Clevr is a consumer-facing payment and rewards platform that provides SMEs with sales and marketing tools. Blue Terra is a conscious-commerce marketplace that delivers eco-friendly and organic products. Both Clevr and Blue Terra have gained significant traction and are in the process of spinning off from the studio and raising their own independent rounds of funding. Enhance’s portfolio currently stands at an IRR of 72%.

In 2021, the company also launched a new corporate innovation business unit called Enhance Innovation to support corporations and government organizations with their studio strategy, and in building individual ventures and studios of their own. The new unit has already had major successes through collaborations with large players such as DIFC and ADQ. Enhance Innovation is increasing its capacity to handle the demand for corporate venture building. Alex Hutley will soon join and lead Enhance Innovation, having served OLX as Global Brand Director and driving internal venture building there. The Enhance leadership team also includes Venture Partner Patrick Montague, ex-COO of the leading New York-based venture studio Betaworks.

July 28th 2022, 10:52 am

The startups 3D printing new smiles

Wamda

When 3D printing technology started to become more ubiquitous around the world, many claimed that there would come a day when every household would own a 3D printer. While such a reality has yet to materialise, 3D printing technology has disrupted several industries, including healthcare.

Coupled with the rise in social media and a healthy dose in vanity, 3D printing technology has become a key component of achieving the perfect smile through clear aligners, an industry that is set to be worth $32 billion by 2030. About 60-70 per cent of the global population want and could benefit from clear dental aligners.

According to the World Health Organisation (WHO), malocclusion of teeth, or teeth misalignment, is the third most prevalent dental disease after dental caries and periodontal disease. Traditionally, metal braces were used to treat patients with mild to moderate malocclusion, but as the cost of 3D printing technology has declined, 3D printed plastic aligners have become the more popular choice to straighten teeth. 

Companies like US-based Align Technology, the company behind Invisalign, adopted a direct-to-consumer (D2C) approach, making use of social media to target consumers. By 2020, Invisalign’s aligners were used by 10.9 million people and worldwide Invisalign shipments were about 413,700 cases. To date, over five million teenagers have started orthodontic treatment with Invisalign clear aligners. 

In the Middle East and North Africa (Mena), the orthodontic opportunity is ripe for the taking, with three regionally-born startups emerging over the past few years, namely Smileneo, Basma and Eon Dental. Using a similar business model to Invisalign, these startups use 3D printing technology, advertise on social media to sell directly to consumers online and offer apps to monitor the progress of their treatment. 

"As an orthodontist, I saw the industry is already being transformed. So I started to think, what if 90 per cent of my job could be automated and replaced by technology? What if we minimise the number of visits to clinics and eliminate part of the cost and pass those savings to the consumer. This had me get started on founding Basma," says Cherif Massoud, CEO and co-founder of Basma.

"I was very frustrated at the thought that clear aligners are an extremely good solution, but it can only be offered to the rich because the cost of the treatment is really high. So our mission was to make it more affordable from the beginning onwards. When we looked around us, and we saw how others were doing it, so there was the regular dental clinic that you can go to that has a pretty expensive treatment, and is not using the power of technology. There is no CRM, there is no integration with the buy now pay later companies and no proper customer support. We saw a lot of gaps," he adds.

Basma was initially founded in Lebanon before moving its headquarters to the UK, but the startup has its operations team based in the UAE, focusing primarily on the GCC region. It handles consultations, the scanning and treatments as well as produces clear aligners in-house while providing an end-to-end digital solution for payments. Last year, Basma raised a $3 million Series A round in order to ramp up its operations in the GCC and grow its network of clinics. 

UAE-based Smileneo came out of stealth mode last year after securing $2 million in a Seed round and securing a licence from the Dubai Health Authority for its teledentistry platform. 

“Based on our research, 85 per cent of people in the region could benefit from orthodontic treatments, but less than 1 per cent receive it each year,” said Jonathan Doerr, founder and CEO of Smileneo in a statement. “Many of them don’t have access to quality orthodontic care that fits their budget and busy lifestyles. We’re digitising orthodontics to modernise and improve patient experiences while enhancing convenience and affordability.”

The best funded of these startups is Jordan’s Eon Dental, which managed to secure a $26 million Series B round. For Eon, the pandemic was a key accelerant of their business as clear aligners proved to be the best suited treatment as they do not require frequent visits to clinics or dentists. 

"The overall narrative around clear aligners is changing dramatically, especially post Covid-19,” says Qais Sabri, CEO and co-founder of Eon. “There has been a serious change in terms of adoption, market record, market potential and willingness to accept the fact that clear aligners is becoming a thing. The segment blew up along the lines of self care and self improvement, because people were spending a lot of time home on Zoom calls, focusing on improving the health and appearance of their smiles." 

Global expansion 

Besides Jordan, Eon also operates in Europe, Asia, and North America, which dominates the global dental 3D printing sector. 

Cultivating a global mindset has enabled the startup to tap into a global talent pool and benchmark its product with international competitors, Sabri argues.

"Being an emerging business based out of an emerging market has not given us the vantage point or access to talent and now being a global business allows us to become a more decentralised organisation and that means more power and more resilience," he adds.

The market in the region presents tremendous opportunities for growth for all three startups. That said, they are all actively looking to target other markets where the purchasing power is higher and the size of the dental tech market is bigger. 

Echoing similar sentiment, Massoud says that Basma has robust plans to further scale its business in Europe.

"It is a growing segment in the market; it's about $150 billion globally. Meanwhile, in the Middle East, it is a market worth around $4.1 billion. In the next five years, we want to have half our revenue from the Middle East and the other half from Europe. Of all the markets we operate in, Saudi Arabia is our biggest target market," he concludes. 

 

July 28th 2022, 10:52 am

Egypt’s fashion marketplace TFK closes $2.6 million Seed round

Wamda

Press release:

The Fashion Kingdom (“TFK”), Egypt’s pioneering curated fashion, beauty and home accessories e-commerce marketplace with 360 value proposition for brands, announces the successful completion of a $2.6 million Seed funding round.

The Seed funding round was co-led by CVentures, Egypt’s first corporate venture capital firm and A15, MENA’s leading early-stage venture capital firm which made a follow-on investment with participation from existing investors and fashion industry veterans Paul Antaki and Nasser Chourbagi. New participating investors include Lotus Capital, the sustainability and inclusion venture fund, Africa-focused investors Raba Capital, Sunny Side Venture Partners, Foundation Ventures and The Cairo Angels.

Proceeds will be used to accelerate TFK’s efficient growth, build scalable technology and grow the team. Another strategic priority is to strengthen and scale TFK’s 360 value proposition for brands which involves offering a one-stop-shop solution covering operations, co-marketing, omnichannel, and digital content creation services that assist local fashion brands in their digital transformation efforts, grow their online sales and help them become more sustainable. 

The co-Founders Fadi Antaki, Marianne Simaika and Karim Abd El Kader launched TFK in July 2020 with the purpose of helping local fashion entrepreneurs and brand owners sell online, serving customers through an affordable and convenient shopping experience and creating meaningful careers for young and emerging talents. 

TFK is currently helping more than 200 local and international leading brands grow their sales online through their curated marketplace and 360 value proposition. Besides, over 135,000 customers are using TFK for their fashion shopping needs. The company also supports the careers of female talent as 50% of the company’s managers and 43% of its workforce are women. 

Fadi Antaki, Founder and Chief Executive Officer at The Fashion Kingdom said: “We are delighted to announce The Fashion Kingdom’s $2.6 million seed fundraise. The support of new and existing investors is a proud moment for the entire team.

“TFK is a curated marketplace much needed by the rapidly growing fashion e-commerce world. Our market opportunity is vast, and the drivers underpinning it - are compelling. We have grown by more than 3.3x in the last year, and the online customer groups we cater to, are only growing larger. Our competitive differentiators, plus access to our investors’ wealth of knowledge and regional expertise, positions us perfectly to become the market leader in Egypt and beyond.”

Egypt’s fashion e-commerce space has no clear market leader, and TFK is filling the gap. The company’s KPIs are compelling: order numbers have grown 3.3x year-on-year, with this rate set to continue in 2022. 

TFK’s total addressable market is $4.2 billion in Egypt including Fashion, personal beauty & household, and home furniture e-commerce categories according to the latest research by Statista. In 2021, the global fashion e-commerce market value was nearly $700 billion. By the end of 2022, it is expected to surpass that figure, and in 2025, it will reach around $1.2 trillion according to Statista. 

Shady Tadross, Director at CVentures, said: “TFK’s digital launchpad for fashion, beauty and home accessory brands conforms well with Egypt’s rapidly moving e-commerce scene, essentially enabling small and large brands to sell online as the Company makes shopping easy and accessible for a large and growing target audience. CVentures is excited at the prospect of working closely with TFK, and we look forward to helping Fadi, Marianne and Karim achieve their vision and grow into additional markets.”

July 26th 2022, 11:07 am

Creative Dock Group’s FoundersLane expands to Egypt

Wamda

Berlin-based corporate venture builder FoundersLane, which was recently acquired by Creative Dock Group (CDG), has expanded its operations to Egypt. This comes as part of the Group's commitment to invest up to €100 million in startups based in the Middle East and North Africa (Mena).

The new venture, named FoundersLane Egypt, is co-led by Egyptian entrepreneurs Mohamed Aboulnaga and Anas Rabah, both venture capitalists and former startup founders. Aboulnaga recently founded PiE, an acquisitions and mergers (M&A) advisory firm and is the co-founder of MNT-Halan, an Egypt-based fintech super app and one of the country's best-funded startups. Together, Rabah and Aboulnaga worked as a duo at Halan and UAE-based super app Careem and recently co-founded Klivvr, a fintech-focused venture capital firm.

“Many of the large corporations in the country are still yet to wake up to the benefits of digitisation. The corporate venture building concept pioneered by the likes of FoundersLane will shake up the traditional way of doing business while enabling startups to have the opportunity to work with corporate partners and have access to investors and mentorship. This will ultimately result in increased digitisation across most traditional sectors like FMCG," Rabah told Wamda.

Besides Egypt, FoundersLane also has an office up and running in Saudi Arabia. The company has provided services to many clients across Mena including in Saudi Arabia and Kuwait. It counts Saudi public transport and logistics company Saudi Arabia Transport Company (SAPTCO) as one of its corporate clients. 

Egypt is the third-largest ecosystem in Mena. In the first half of this year, Egyptian startups managed to raise $317 million, a 156 per cent increase year on year.

July 25th 2022, 11:39 am

Can Palestine become a birthplace for impact-driven ventures?

Wamda

Majd Zghyer is the strategy officer at uMake, an entrepreneurship support organisation (ESO) based in Ramallah, Palestine.

In a recent encounter with my friend Baker Bozeyeh, co-founder and CEO of Flowless Water Systems, the word that came up most often throughout the conversation was ‘impact’. Inspired by the need to provide a tech-enabled solution to the challenges of managing water usage, Baker and his colleagues have embarked on a grand ambition of building an ‘impact-driven’ business that seeks to address water scarcity challenges in Palestine and across the world. A graduate of Palestine’s Founder Institute pre-Seed accelerator programme, Flowless represents a genuine success story of determination, resilience and commitment to deliver positive impact. Since its establishment in 2019, Flowless has managed to provide its smart water management technology to a number of diverse beneficiaries across Palestine and Jordan. Currently, the startup is planning to scale its operations in some countries across sub-Saharan Africa to help in the global effort aimed at delivering sustainable access to safely managed water to 2.2 billion people.

Ultimately, achieving positive measurable social, economic and environmental impact has been gaining popularity from diverse business communities across the globe. The mantra of ‘Doing Well by Doing Good’ has infiltrated economic thinking and it has been used widely by top tier CEOs of large corporations such as Larry Fink, the CEO of BlackRock, the US-based investment management firm which manages more than $10 trillion in assets. In his latest annual letter to CEOs, Fink referred to the ‘power of stakeholder capitalism’ in providing sustainable solutions to the enormous challenges that face our societies in an interconnected globalised economy. Precisely, he advised business leaders to shift from solely focusing on maximising shareholder value into a long-term inclusive approach that takes into consideration the well-being of and impact on all stakeholders affected by the company’s activities, including its customers, employees, suppliers and the surrounding environment.

The impact investing revolution

The ideas in Larry Fink’s annual letter have been embraced by a wider segment of the global investment community and are now being echoed across various asset allocation categories including public markets, private equity and venture capital. Importantly, impact investing has emerged as a distinct field from the standard environmental, social, governance (ESG) investment practices adopted by an increasing number of companies across the world. While ESG investing is focusing on merely ‘reducing harm’ through managing risks, impact investing, on the other hand, goes one extra mile by ‘intentionally’ prioritising the creation of sustainable solutions to complex developmental challenges through investing in businesses that aim to deliver financial returns and simultaneously achieve a lasting real-world impact. According to official numbers by the Global Impact Investing Network (GIIN), the impact investing market has grown from $512 billion in 2018 to $715 billion in total assets under management by the end of 2020. Moreover, a 2022 survey by global asset managers Schroders, covering 770 institutional investors that manage more than $27 trillion worth of assets, found that 48 per cent of asset owners covered in the survey believe that impact has become a preferred investment approach to achieve sustainability goals while also delivering positive financial returns.

Indeed, investments made for the intention of achieving measurable impact alongside a robust financial return have also been deployed into impact-driven tech and tech-enabled startups that aim to solve critical development challenges that face emerging markets and developing economies. The United Nations Development Programme has been active in promoting impact investing as a path towards achieving the 17 globally recognised sustainable development goals. From fighting extreme poverty, ensuring quality education to providing clean water and sustainable energy sources, allocating capital to innovative tech-enabled businesses has become an effective tool to increase the private sector’s role in achieving the SDGs and help create a more prosperous, sustainable and inclusive world by 2030.

Across the Middle East and North Africa (Mena) region, a diverse geography that faces insurmountable development challenges, VC funding deployed in impact-driven ventures has seen a compound annual growth rate (CAGR) of 15 per cent between 2016 and Q3 2021 - totalling $444 million of capital invested across 403 VC transactions – based on findings of Magnitt’s 2021 MENA VC Impact Investment Report. Yet, the total invested amount represents only 7 per cent of all VC capital deployed and 16 per cent of all VC transactions across Mena. Despite the positive growth in recent years, it’s believed that Mena-based investors and startups have the key ingredients to promote and stimulate the impact investing industry even further and take it to the mainstream of VC investing in the region. Another pertinent consideration is the geographic concentration of VC impact investments across Mena. While Saudi Arabia registered the largest number of VC impact investment transactions (80 deals, representing around 20 per cent of the total 403 deals), impact-driven startups based in the UAE attracted the biggest impact VC funding volume with $164 million raised - representing 37 per cent of the total capital deployed in impact-driven ventures across Mena between 2016 and Q3 2021. The most-funded impact-driven startup was Dubai-based Yellow Door Energy which managed to close an investment round of $65 million in 2019 led by the International Finance Corporation (IFC) and Arab Petroleum Investments Corporation (APICORP).

While we should celebrate the rapid transformation happening in the region’s most advanced startup ecosystems (those in the UAE, KSA and Egypt), VC impact investing can also offer an alternative route for less developed ecosystems to flourish and scale in various sectors including edtech, healthtech, agritech and fintech. In other words, nascent startup ecosystems such as Palestine can be perfectly positioned to create a pipeline of impact-driven businesses capable of attracting the attention of impact investors from the region and beyond. Of course, similar conditions can be applied to other startup ecosystems across the region as well despite the focus here on Palestine given its unique context, challenges and untapped potential.

Profit and purpose are inseparable in Palestine

Palestine and its economy are facing huge challenges due to long years of political instability, military occupation and restrictions on movement of people, capital, goods and services. Despite the challenging situation, Palestinian business leaders and entrepreneurs have managed to navigate through the storms and build successful, viable and impactful businesses. Operating in a tough business environment can provide the seeds for innovation and sustainable impact where profit and purpose can merge to enable a plethora of opportunities to unlock the development potential of local communities. Within the Palestinian context, impact can naturally be embedded in the venture’s business model. Contrary to the conventional wisdom, challenges can now be seen as opportunities rather than threats. It is time to believe that Palestinian impact-driven ventures are capable of creating attractive and often overlooked investment opportunities for impact investors from the region and beyond who want to do well by doing good.

Palestinians themselves are leading remarkable efforts in moving impact investing into the mainstream and trying to find more efficient alternatives to the traditional ‘donor-recipient’ relationship that has prevailed for decades. For example, Palestine’s Sovereign Development Fund, PIF, plays a catalytic role in creating the foundations for a thriving impact investing industry in Palestine through its huge investments in strategic sectors such as clean energy, healthcare, agriculture, education and technology. PIF does not only invest directly in these critical sectors, it also plays an influential role in attracting regional and global partners to invest in Palestine’s future.

Within the Palestinian entrepreneurship ecosystem, the leading VC fund in Palestine, Ibtikar, is providing a similar role to PIF by offering much needed ‘smart’ capital (Seed and Series A) to high-potential early-stage startups founded by Palestinian entrepreneurs. Though not explicitly categorising itself as an impact investor, Ibtikar continues to fund tech and tech-enabled startups that respond to developmental challenges and can scale regionally and globally.

Hopefully soon, we will witness greater attention directed to Palestinian impact-driven ventures by regional and global impact investors. These Palestinian impact-driven ventures are addressing challenges in critical fields such as Sunbox in the clean energy industry, Hakini in mental health, Naviatx in insurance and Greeners in agriculture - to name a few. There is no doubt that like the passion and enthusiasm that drive the founders of Flowless to succeed, Palestinian impact-driven ventures are capable of providing robust financial returns while also delivering impact to the wider region and the world.

 

July 25th 2022, 11:39 am

Egypt’s Cartona raises $12 million Series A round

Wamda

Press release:

Cartona, a B2B platform based in Egypt, has closed its $12 million Series A fundraise led by Silicon Badia - the venture capital firm investing in global technology entrepreneurs, together with the active participation of the SANAD Fund for MSME, an impact investment fund dedicated to supporting entrepreneurs in the Middle East and North Africa. Arab Bank Accelerator and Sunny Side Ventures also participated, alongside existing investors - Global Ventures and Kepple Ventures.

Founded in 2019, Cartona is digitising the traditional trade market in Egypt including mom-and-pop stores, FMCG producers, wholesalers, and distributors. The startup embraces a cashless society vision, investing in embedded finance, payments, and operational integration with all stakeholders. This provides retailers and suppliers with an integrated solution boosting financial inclusion enabling them to run and grow their business more efficiently, and reach end-consumers with essential products at affordable prices.

Cartona’s model is asset-light, not owning a single product or warehouse or vehicle. This allows Cartona to execute its strategy of digitizing Egypt’s traditional, largely offline trade market by eliminating inefficiencies across the supply chain while enabling seamless financial services solutions to an underserved network of hundreds of thousands of shops. Mahmoud Talaat, CEO and co-founder of Cartona, commented:  “We are delighted to complete our Series A fundraise. The market context for Cartona is hugely attractive, and we are just getting started. Egypt has hundreds of thousands of mom-and-pop stores that are core to our business model. We will continue empowering them via efficient and seamless solutions in their trade and financial cycle with FMCG companies and wholesalers, aligning with our mission to help people better manage and control their businesses.”

The Egyptian market opportunity for Cartona is compelling. The overall retail market size is $120 billion, with the Food & Beverages market worth $70 billion. There are over 400K shops and thousands of international and local brands across Egypt, with the sector growing annually by 8%. Namek T. Zu’bi, Founding Managing Partner at Silicon Badia, said: "We are thrilled to partner with the Cartona team to help them continue to disrupt the $120Bn Egyptian retail market through its B2B technology platform and embedded financial service offerings. The market is hungry for these types of solutions and we believe Cartona's asset-light approach will allow them to serve as many marketplace participants as possible in a highly efficient manner."

Proceeds will be used to turbo-charge Cartona’s expansion across Egypt, cover all governorates, grow its product, technology, and services, and explore new verticals beyond FMCG. Dr Daniela Beckmann, SANAD Board Chairperson concluded: “We are incredibly proud of this transaction as it is the first investment of SANAD ESF II in Egypt, continuing the success of ESF I investments made in the country. By providing both financing and software tailored to the market, Cartona’s digital platform is supporting innovative MSME retailers across Egypt, which will greatly contribute to SANAD’s mission of pursuing growth and employment creation across the region.”

July 25th 2022, 11:39 am

UAE’s Qstay closes $6.5 million Seed round

Wamda

Press release:

Qstay Hospitality Technologies ("Qstay" or the "Company"), a Dubai DIFC-based next-generation hospitality company that is redefining the guest experience through technology and design, announced that they have recently closed on a SEED round of $6.5 million. Funding was a mix of debt and equity.

Qstay was officially launched in 2020 and was co-founded by long-time UAE resident Artur Khayrullin, CO-CEO; Ukrainian-born Ekaterina Rogozhina, CCO; Ukrainian American Alec Fesenko, CO-CEO and his wife Natalya Fesenko, the initial investor. Since its founding, Qstay has executed its mission to transform the hospitality industry through modern, technology-powered service and inspiring, thoughtfully designed accommodations, combined into one seamlessly managed experience. Qstay currently operates close to 200 properties in the UAE and Europe, 200 more are signed and expects to have 450 revenue-generating units by the end of 2022.

Qstay operates as a virtual hotel brand which provides luxury hotel-like services and amenities such as bathrobes, slippers, luxury toiletries, bathroom amenities, tea, and Starbucks coffee, additionally, Qstay provides digital app-based access to nearby pools, beaches, gyms and spas for its guests staying in beachfront properties.

Qstay holds coveted Superhost status and higher ratings on Airbnb than its competitors. That translates into an exceptional occupancy rate, which is now consistently above 80% and an outstanding REVPAR of $195, which is well above the competition. Qstay has had positive EBITDA for the last two quarters and projects to be Net Income positive in Q4 2022, only in the second year of operation.

The company's revenue has been growing at a rate of over 100% quarter over quarter and Qstay expects its portfolio to grow to over 600 units and to achieve revenue of $50 million in 2023.

Qstay’s founder and CO-CEO Artur Khayrullin says the capital will be used to "accelerate the amazing growth we've seen so far," The concept plans to expand to at least five cities across Europe and the Middle East in the next 12 months.

"Driven by QSTAY's differentiated digital service model, the Company can reduce operating costs by as much as 50% compared to traditional hotels. Through innovative technology, additional digital services such as mobile-based access to the facilities of top beach resorts and thoughtfully designed accommodations, QSTAY is revolutionising the hospitality industry," says Artur Khayrullin. "With one-of-a-kind modernised service, our guests experience an uncompromising quality with inspiring design at a price point that democratizes access to an extraordinary hospitality experience."

The company leases large groups of units in the top locations, upgrades and furnishes them to the consistent luxury standard and supports them with extensive luxury hotel-like services and amenities, providing guests with exceptionally designed accommodations at affordable prices on a nightly, weekly or monthly basis.

The company also offers text-enabled around-the-clock concierge service, and confirms that while it doesn't own any of its units, all of them "are directly leased and managed by Qstay." 

"Our raise underscores the strength of the business and the rapid shift taking place within the hospitality industry due to technological innovations. Our vision for travel is making beautiful, well-designed spaces accessible to everyone with technology while providing exceptional mobile app-based add-on services," said Alec Fesenko, co-founder and CO-CEO. "We are far more efficient than traditional hotels while also providing a unique space and add-on services that are flexible enough to meet everyone's needs. Whether you're travelling on your own, for business, with your family or with friends, you will always have a space that can accommodate you."

Currently, Qstay is developing a differentiated, tech-driven platform that will provide seamless booking, digital concierge and a unified, on-demand platform for maintenance and service.

This raise will provide Qstay with additional capital to accelerate and supercharge Qstay's vision. 

Qstay plans to further capitalise on opportunities within the growing $800+ billion global lodging market and strengthen its position as a differentiated, rapidly growing innovator in the hospitality industry. Over the next few years, Qstay plans to continue investing in technology and expanding its footprint and product offering to drive an unparalleled guest experience, while also delivering even greater value to its investors, real estate partners and guests.

July 24th 2022, 11:06 am

Palestinian e-commerce Modesta raises six-figure Seed round

Wamda

Press release:

Modesta, a modest fashion startup, has raised six figures of funding in its SEED round led by 500 Startups and with the participation of the Innovative Private Sector Development Project (IPSD) program funded by the World Bank, and angel investors.

Founded in March 2020 by Shatha Ajaj, Modesta is a fast-growing modest fashion e-commerce startup, that provides diverse modest choices for women whatever their interpretation of modesty.

According to the company, modest fashion has evolved significantly in the last 10 years attracting women from all around the world who choose to wear less skin-revealing clothes either for religious or personal reasons. Modesta aggregates special collections from various vendors and brands, aiming to make finding modest fashion for an everyday easy and enjoyable experience.  "We are creating our own modest movement through collecting unique season’s latest collections that satisfy the needs of modern women who adopt modesty in their lifestyle. Modesta has gained great popularity since the start in March 2020, delivering thousands of parcels to the doorsteps of our happy customers”. Shatha Ajaj, the founder and CEO of Modesta, commented on the investment. 

Modesta will deploy the latest funding into expansion and reach a wider base of customers in Saudi Arabia and Bahrain along with the growth of the technology to aggregate more brands and vendors. Ajaj concluded, “The promised land for Modesta is a global vision as a leading Modest fashion e-commerce for women to express their individuality” Shatha added.

July 22nd 2022, 7:04 pm

FMO announces $10 million commitment to Algebra Fund II

Wamda

Press release 

FMO, the Dutch entrepreneurial development bank, and leading Egyptian venture capital firm Algebra Ventures today announced the signing of a USD 10 mln commitment for the fund manager’s second fund. The agreement was signed in the presence of H.E. Mr. Han-Maurits Schaapveld, the Dutch ambassador in Cairo.

Announced in April 2021, Algebra Ventures’ second fund invests in technology start-ups in Egypt with an allocation for the wider Middle East and Africa region. In addition to FMO who is investing through the FMO Ventures Program, other investing partners include the International Finance Corporation (IFC) and European Bank for Reconstruction and Development (EBRD).

Four years into its first USD 54 mln fund, Algebra Ventures has invested in 21 start-ups and has backed world-class entrepreneurs who are building market-leading businesses. Through their new fund, Algebra Ventures’ managing partners Tarek Assad and Karim Hussein continue to support technology start-ups with access to finance and talent, driving innovation and job creation primarily in Egypt.

For the second fund, Laila Hassan and Omar Khashaba have joined Algebra Ventures as general partners, adding extensive regional and international venture capital investment experience. The fund will pursue early-stage investment opportunities in fintech, agritech, edutech, logistics, e-commerce and healthcare start-ups by partnering with high-potential founders to address specific market gaps in these sectors.

Karim Hussein, Managing Partner at Algebra Ventures, said: “It is an honor for us to have FMO as an investor in our new fund. FMO’s wealth of experience and knowledge across the African continent and their deep expertise in agritech and fintech, in particular, are of significant strategic value to Algebra. We look forward to working closely with FMO to support exceptional companies in Egypt and across Africa.”

The investment by FMO aligns with the bank’s ambition to enable innovative business models for impact across Africa, the Middle East and parts of Asia. The commitment is funded through the FMO Ventures Program, a EUR 200 mln investment program funded by FMO, the Ministry of Foreign Affairs and the European Commission targeting early-stage technology-enabled innovative business models in frontier and growth markets.

Across the Middle East, FMO has invested early in merchant payment platform Paymob (2020), salary payment platform Dopay (2019) and SME lender and marketplace Liwwa (2018). 

Through this investment in Algebra Ventures and other initiatives, FMO continues to support the expansion of the Egyptian venture capital ecosystem.

Marieke Roestenberg, Head of the FMO Ventures Program, said: “We are excited to partner with Algebra Ventures, one of the most deep-rooted and seasoned venture capital firms in Egypt. FMO believes regional investors like Algebra Ventures play an instrumental role in both the creation and maturing of markets. We look forward to continuing to support and learn from the flourishing Egyptian venture capital ecosystem.”

July 22nd 2022, 7:04 pm

Iraqi e-commerce Orisdi raises new investment

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Press release 

The Iraq-based e-commerce business, Orisdi has raised a new six figure investment round that included the participation of existing and new investors. The round was facilitated by the Iraqi Angel Investors Network and served to reinforce the continuous growth of the business and the growing potential of e-commerce in Iraq. 

The round saw the return of existing investors, including Al Sharqiya TV, Mohamed Shaikley, Amar Shubar, Nour Sabri, Kerem Danish, Omar Al Handal from Al Handal International group, and Bassam Falah from Innovest Middle East to reaffirm their commitment to the company. The round also saw the participation of new investors, including Mohamad Ferej, Rayya Al Zubaydi, and others. Ferej is a tech industry veteran and has held leading roles in Ericsson, Lumentis, and Transmode and experienced a successful M&A and IPO. 

Orisdi is a leading vertically integrated e-commerce store in Iraq that offers buyers a convenient shopping experience for a wide range of products to distupt the Iraqi retail market. Orisdi is focused on multiple categories including perfumes, cosmetics, appliances, stationery and electronics, amongst others.

The Total Addressable Market (“TAM”) for e-commerce in Iraq has been growing rapidly on the back of a young population that is increasingly internet savvy. Statista estimates the TAM to be $5.667B in 2022 and is expected to grow to $8B over the coming three years. 

Ahmed Al Kiremli, the Founder & CEO of Orisdi, commented, “We plan to continue to focus on our winning categories as a vertically integrated e-commerce store and to offer only genuine brands”. He added that the company continues to be the most efficient e-commerce player in Iraq in terms of units of economics compared to its competitors through continuous learning and processes optimization and that the business is approaching the break-even point.

Mohsen Khairaldin Garica, Managing Director of Investments at Al Sharqiya Group and a member of the Iraqi Angel Investors Network, commented: "I believe we will soon see an increase in M&A opportunities in the Iraqi e-commerce market as ventures like Orisdi and its competitors mature. Mohammed Shaikley, one of the early and returning investors of Orisdi, added, “We are happy to see the rising interest and involvement of regional VCs in Iraq during the last 12 months. Iraq has a big potential as a tech market with an underserved population of over 42 million”.

Al Kiremli added:, “We were able to overcome an important milestone by completing the company registration at Abu Dhabi Global Markets (ADGM); this will provide a more attractive legal structure for regional and international VCs looking for exposure to Iraq's e-commerce future.” So If you are an angel investor or a VC interested in investing in the Iraqi tech ecosystem, Orisdi remains open to raising additional funds in order to facilitate the scaling of the company.

The investment has been facilitated by the Iraqi Angel Investors Network, an initiative by Kapita sponsored by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH via its project “ICT for Youth in Iraq”.

 

July 22nd 2022, 7:04 pm

Pan-African CAIF fund closes at $112.8 million

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Press release:

AfricInvest, a leading multi-asset investment platform in Africa and global venture capital firm Cathay Innovation, have completed the final close of their joint Pan-African Venture fund, Cathay AfricInvest Innovation Fund [CAIF], at €110 million ($112.8 million). The fund is backed by LPs such as EIB, AfricaGrow, FMO, Bpifrance, Triodos Investment Management, Proparco, SIFEM, BIO and, among others, as well as a diverse pool of globally renowned investors, including Development finance institutions, leading multinational corporations, and high-net-worth individuals across Europe, Africa and the Middle East.

With the close of the fund, the CAIF team will significantly deepen their focus on investing in the most promising early to growth-stage startups improving African lives with disruptive tech-enabled products and services. With initial check sizes ranging from €1-10 million for growth-stage and up to €1 million for select Seed-stage tickets, the fund invests in startups across multiple sectors, including fintech, mobility, healthtech, edtech, AI, digital content and agritech. Since its inception in October 2019, CAIF has backed ten prominent companies operating across the continent, including 54gene, OZÉ, Migo, PalmPay, Heetch, KaiOS, Boomplay, Aerobotics, and WhereIsMyTransport. Most recently, the fund co-led Tunisia-based edtech startup GoMyCode’s $8 million Series A round.

“AfricInvest’s partnership with Cathay Innovation brings to Africa global expertise in the innovation space combined with a robust network in Europe, the US and Asia, all helping to build bridges between Africa and the rest of the world, allowing the fund’s investees to grow into regional and global champions,” said Yassine Oussaifi, Partner at AfricInvest and co-head of CAIF.

“As technology scales and brings massive upgrades to global populations, startups are critical in building the new digital infrastructure needed for emerging regions like Africa to redefine industries and society in the 21st century. We’re proud to partner with the AfricInvest team — connecting the entire African continent with tech hubs around the world — in a shared mission of accelerating the transition to a more digital, sustainable and inclusive economy for Africa and beyond,” added Mingpo Cai, founder and chairman of Cathay Capital and Cathay Innovation.

Since its launch in 1994, AfricInvest’s multi-strategy platform has actively contributed to strengthening the private equity and venture capital ecosystem in Africa. CAIF relies on AfricInvest’s rich investment expertise, its extensive pool of resources from its network and its physical presence across 11 regions through offices including Abidjan, Algier, Cairo, Casablanca, Lagos, Nairobi, and Tunis to provide local hands-on support, create synergies with portfolios and assist with geographic expansion. With over 200 portfolio companies across 25 African countries in a variety of high-growth sectors, of which 106 have exited, AfricInvest has, to date, raised over $2bn AUM across 21 funds and benefits from strong, long-term support from both African and international investors. 

Founded in 2015, Cathay Innovation is a leading venture capital firm providing entrepreneurs with the support of a global ecosystem across North America, Europe, Asia, Latin America and Africa. The global platform unifies technology investment across continents, investors, entrepreneurs and leading corporations to accelerate startup growth with access to new markets, invaluable industry knowledge and introductions to potential partners from the start. With over €2 billion in assets under management and offices across 3 continents, Cathay Innovation has a strong track record of over 120 global investments, including 19 unicorns, in startups accelerating industry and society's sustainable and digital transformation. 

CAIF enables promising ventures to build and scale innovative technologies that drive inclusive socio-economic growth in Africa. To date, the fund has proved tremendous traction and scalability with portfolio companies expanding their global footprint to over 21 markets across the continent. The Fund’s portfolio companies have also aggregated significant impact at scale in recent years with around 136 million Africans reached with inclusive and digital solutions–meaning $1 spent reaches more than one user on the continent. With its current portfolio, the Fund has created and sustained over 1,400 direct jobs, with women representing an average of 35% of the workforce. Deployed by a team of investment professionals located in the centres of VC innovation across Africa, the fund will continue to support African entrepreneurs to scale their innovative technologies across the continent and beyond, as well as support global entrepreneurs in their expansion into Africa.

“The Cathay AfricInvest Innovation Fund was born from the idea that innovative and tech-enabled startups in Africa are solving important problems and socio-economic gaps. We see this funding opportunity as a means to deliver strategic support to the outstanding startups looking to innovate and improve lives in Africa. Already, CAIF has reached over a hundred million people through job creation and inclusion. However, there are still millions across the continent with limited economic resources on our radar,” said Khaled Ben Jilani, Senior Partner at AfricInvest and co-head of CAIF.

The venture capital market in Africa has seen exponential growth over the last decade with the acceleration in digital transformation across all sectors. As a result, the industry is becoming the fastest-growing innovation ecosystem globally. In 2021, the ecosystem reached a new milestone of c.$5 billion in venture capital, more than the preceding two years combined and close to three times more than in 2020. As one of the largest early- to growth-stage Pan-African innovation funds, the final round places CAIF in a solid position to double down its efforts to focus on innovative and scalable post-revenue ventures based in, or with a focus on, Africa. As a result, CAIF will continue to firmly stand at the forefront of the continent’s rapidly evolving VC scene.

July 22nd 2022, 7:04 pm

Navigating the slippery slopes of uncertainty

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Rani Salman is the managing partner at Caliber Consulting, a UAE-based boutique consulting firm

As the evolutionary biologist Charles Darwin once said, “It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.” Contextualising his theory to the current business environment, this level of change has reached a zenith in the past few years with unprecedented socio-economic, political, medical, and technological disruptions impacting the globe at large.

The recent global disruption brought on by Covid-19 caused most businesses to face a level of uncertainty they had never accounted for, putting them, and particularly startups, in a unique position. On one hand, startups can be more agile than their larger and heavier corporate counterparts, yet on the other hand, they often lack the deep pockets, experience, and resources needed to make power moves, especially during tough times.  Often, however, the real difference-maker boils down to critical decision-making and the levels of agility embedded in that organisation’s DNA.  

Although the onset of Covid-19 was an unprecedented phenomenon, out of everyone’s control, startups in a natural steady state struggle to deal with internal and external realities. Even In a stable economic environment, they are prone to financial instability because the business model is not yet typically concrete and funding could be dependent on investors and capital ventures. Having a playbook to navigate the business landscape is crucial for startups and can help them either sink or swim when uncertainty reveals itself.  

Uncertainty can be a blessing in disguise, as it offers opportunities for businesses to reimagine their strategies, business models, and operating models to gain competitive advantage and propel growth in customer share.

The playbook revolves around four key steps and guiding principles, which when adopted effectively, help, and increase an organisation’s chances for success.

  1. Sense: Ensure your organisation’s antennas are high-powered and can sense a change in internal and external environments. This entails building a capability to see around corners and signal to detect risks and opportunities before they unfold, or before it is too late.

  1. Strategise: Quickly frame the strategy and business model once a trigger for change has been sensed.  Business model innovation revolves around entering new customer segments, business lines, product categories, or value chain integration. A good example of this was the first mover gin makers in Europe who quickly set up new production lines for hand sanitising alcohol on the onset of Covid-19.

Another key component of strategising involves scenario planning and laying out the various potential strategic options that could unfold and how to tackle them.  Creating a playbook for each of the scenarios keeps the team prepared for once the uncertainty becomes a reality.

Furthermore, hedging risk is often a good approach and ensures all your eggs are not in one basket, by having a diversification strategy focusing on multiple customer segments, business lines, and/or channels.

We can see the example of Airbnb, the decision-makers mobilised the product and took it to different customers in different regions, hence globalising efforts made Airbnb a tourism giant. This way when one market is unprofitable there are other channels that help sales and grow brand identity. Airbnb made a crucial decision to use the online platform to connect with customers and give them a comfortable traveling experience.

  1.  Select: Place your strategic bets and begin mobilising and implementing the needed strategic changes. However, in a world of uncertainty and dynamism, the implementation cannot be with a “big bang,” approach, and it is preferable to take a pilot, test, learned, adapt, and scale approach.    

Take for example Groupon, a feature in the startup app originally called ‘The Pointe’ which was essentially a crowdfunding site that allowed users to raise money to support causes that resonated with them; however, the website saw more traffic being generated by ‘Groupon’ than any other feature. The management took a decision to pivot when they realised the business was making a loss and launched Groupon as a standalone business venture.

Moreover, Snap bar, a small business that offered on-ground event services was particularly hit by the lockdown, however, they were quick to pivot and launched themselves as a gift box company that collaborated with local businesses. Snap bar is one example of a company changing quickly and adapting to the current environment. The lesson to be learned here is that management needs to strike strategic partnerships to build a sustainable business model when the opportunity arises.

  1. Sustain: Build true agility into your DNA by injecting it into all parts of your operating model i.e., the key components of your organisation like structure, people, management systems, technology, and most importantly culture.  Once your operating model is agile, this gives you a supreme advantage in adapting to uncertainty.  

 

. 

Globally there is a pall of uncertainty brought on by the political unrest in the West, due to this, many startup CEOs must adopt a conservative approach to get through a tough financial crunch. Startups rely on funding especially for the first few years until the business model starts generating steady profits. To ensure the business does not run out of money, startups can shift to the cash preservation approach, to make sure that the company survives until new and better fundraising opportunities arise. Tough but crucial decisions include: 

  1. Halting investments in new projects/products and services may have to be undertaken along with hitting a pause on expansion into new markets. 

  2. Dropping marketing and advertising costs, especially for on-ground initiatives which require a handsome monetary budget. Companies should consider moving to digital advertisements and leverage strategic partnerships that will help build the online presence and brand identity of the company (consider barter transactions). 

  3. Startups have a great opportunity to build an online presence and move away from the traditional ‘brick and mortar’ business setup – this saves costs of rents and utilities as well as allows companies to expand their geographical presence.

  4. Cultivating a culture of honesty and transparency in tough times is crucial as leadership will have to adopt efficient policies that minimise time wastage and give stricter targets which must be achieved in a shorter time frame. 

  5. Considering the option of paying for services with shares which will help with the current cash flow, this approach can also be taken to pay key employee salaries.

  6. Reworking job roles in the company and identifying vacant positions that do not need to be filled and allocating that budget elsewhere. 

  7. Last and perhaps the least favourable approach would be to strategise the company for downsizing and redesigning the organisational structure. 

Whether it is geo-political crises, global viruses, economic recessions, or other less significant changes; uncertainty now has become the norm.  Startups are in a unique position to flourish in this new normal as they can often be quicker to adapt and pivot. However, a playbook and guiding principles should be kept in mind for ultimate success.

 

July 22nd 2022, 7:04 pm

Sudanese fintech Bloom raises $6.5 million Seed round

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Source: TechCrunch

Bloom, a Sudan-based fintech that offers a high-yield savings account and adjacent digital banking services, has raised a $6.5 million seed round. This investment is coming after the startup’s undisclosed pre-seed round last year.

This financing welcomed participation from fintech giant Visa, Y Combinator, U.S.-based VCs Global Founders Capital (GFC) and Goodwater Capital and UAE-based early-stage firm VentureSouq. Other investors include angels Arash Ferdowsi, Dropbox co-founder; Nicolas Kopp, former U.S. CEO of N26; footballers Blaise Matuidi and Kieran Gibbs; and early employees at Revolut and Tide.

The investment from Visa came as one of the incentives for Bloom’s participation in the global card scheme’s Fintech Fast Track Program. A partnership was formed, and as a result, Bloom — the first Sudanese startup to get admitted into the program — switched its cards from Mastercard to Visa.

“The Visa investment is critical for companies like us for a couple of reasons. One, aligning with Visa as a partner gives you a bunch of benefits, launching products faster, marketing support and product support; and two, in addition to the investment, Visa Fintech Fast Track enables you to access these incentives in a streamlined way,” CEO Ahmed Ismail told TechCrunch in an interview.

In March, the company announced that it was a part of Y Combinator’s winter batch this year after launching from stealth that same month. Also, Bloom’s waitlist was made public in March, and at the time, the company had more than 15,000 people signed up; that number has topped 100,000, the founders told TechCrunch. They say the platform has been launched in Sudan but declined to give specific numbers of customers actively using the product.

As highlighted this March and reiterated in the interview, Bloom’s founders say this seed round will help the Sudanese- and Dubai-based startup - execute its expansion plan across the Anglo-East African region such as Ethiopia, Kenya, Rwanda, Tanzania and Zambia. A few competitors in the region include YC-backed Fingo, Koa and Finclusion.

“Our product is live in Sudan. The plan is to scale in the country and then expand to other markets,” Ismail stated. “We anticipate being in at least one market before the end of the year and a couple more early next year.”

Bloom’s seed round is the largest in Sudan, a country whose tech ecosystem can be termed passive and only recently welcomed foreign investment when Fawry backed fintech and e-commerce player Alsoug after 30 years of international sanctions on the country.

East Africa, as a region, is home to 500 million people, with a median age of 18 and a fast-growing middle class. But the region’s currencies, including the Sudanese pound, are volatile and depreciate 15% to 20% per annum on average. This volatility is one of the biggest impediments to wealth protection and creation for this middle class, which is why Ismail and other co-founders Youcef Oudjidane, Khalid Keenan and Abdigani Diriye launched the fintech: to help Sudanese individuals hedge against this rising devaluation.

Bloom offers fee-free accounts for users to save in dollars and buy and spend in Sudanese pounds. It also provides local and dollar cards and a feature where they can receive remittance free of charge from several countries globally, mainly where most of the Sudanese diaspora reside. The fintech works with the Export Development Bank, a partner bank that handles deposits. Bloom makes revenue from interest on these deposits, the interchange and other ancillary streams.

Executives at Bloom and Visa say this investment and partnership can exponentially drive the adoption of Visa cards in Sudan and East Africa. In addition, Visa’s suite of products and services will provide customers with a secure and fast way to make online payments, according to Ahmed Mohey, Visa country general manager for Sudan and Libya.

“Visa is taking the lead as a first mover in digital payments in Sudan. We are committed to being a part of Sudan’s economic transformation by bringing our global expertise and capabilities to its government and private-sector partners. Together with Bloom, we will continue to drive acceptance of digital payments while finding opportunities to launch new products and services to Sudanese customers and merchants,” Mohey added.

Roel Janssen, a partner at Global Founders Capital, shares similar sentiment about the team: “We are very excited by our investment in Bloom. Its experienced and talented founding team has the drive and expertise to build a product that is universally valued by consumers, partners and regulators in Sudan and the wider East Africa region.”

July 22nd 2022, 7:04 pm

Mohamed El-Sewedy acquires Magma via Averroes Ventures

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Egypt-based Magma, a manufacturer of sportswear, has been fully acquired by its incumbent CEO Mohamed El-Sewedy via venture capital firm Averroes Ventures.

Launched in 2018, Magma is a sportswear brand that specialises in making an athletic mesh fabric with moisture management and anti-microbial qualities. 

Press release

Magma, one of the promising Egyptian sportswear manufacturers, announced its acquisition spearheaded by Averroes Ventures and led by its Chairman, Mohamed El-Sewedy, to meet the needs of an untapped segment of the Egyptian market. Leveraging on its unique technology that represents the core of all its products, Magma offers a distinctive value proposition as a local manufacturer with global potential. The new strategic investments will significantly change the quality of its products, and their presence in the local and regional market.

Magma is amongst the first Egyptian brands to offer high-quality sportswear that inspires and empowers athletes and consumers, and that can compete globally. The production process includes the latest technology, and an advanced R&D department that works on developing fabrics. The company was one of the first movers to use this technology, where it is engineered to enhance performance with fabric featuring breathability, antibacterial properties, odor resistance, fast drying & sweat-wicking properties.

Commenting on the acquisition, Mohamed El-Sewedy, Magma’s Chairman, said, "We have made great progress, and have very optimistic plans after the acquisition of Magma, including regional expansion in the Middle East and Gulf region very soon, as well as the opening of a leading state-of-the-art store in Egypt in 2023. These are significant milestones in the company's journey. I expect Magma will become a leading global sportswear brand in the region, by investing in product materials and textiles based on the latest technology, as well as the latest know-how in e-commerce. We also aim to diversify and develop products and designs by top designers to meet modern market demand for high quality, contributing to a booming economy that encourages local manufacturing and exports to other markets."

Dr. Ahmed Alsharif, Co-founder and CEO Averroes Ventures added, "We believe in the growth potential of native brands and designs accompanied by cutting edge technologies together with the growing demand of e-commerce, creating a winning formula for Magma. The new investments and the management team are well capable of transforming this company to a global player in the growing sector of sportswear and athleisure." Moreover, Averroes Venture invests and supports early-stage startups and SMEs operating in the logistics technology, food, Agritech and e-commerce industries in Egypt and the MENA region.”

Also commenting, Amr Abu Ali, CEO of Magma, "The company’s acquisition spearheaded by Averroes Ventures, and led by Mohamed El-Sewedy is an important step in Magma's history, for his great reputation and confidence in the Egyptian and regional economy. Increasing Magma’s product offering to meet the demand of new market segments, is an important decision we made, and this includes increasing functional sports and athleisure clothing lines for men and women, designed for daily exercise and wear, with future plans to introduce teamwear, beachwear, accessories, footwear, and a kids’ collection.”

Magma Sportswear had started online, and recently expanded its retail business through well-known outlets such as Debenhams. Magma also benefits from a very strong team experienced in the e-commerce sector.

July 22nd 2022, 7:04 pm

DeFi platform ZKX raises $4.5 million Seed round

Wamda

Source: Business Insider

Dubai-based DeFi platform ZKX raised $4.5 million in seed funding today from StarkWare, Alameda Research, Amber Group, Huobi, Crypto.com and others.

The decentralised finance platform helps make faster transactions and keeps gas fees low, and is built on StarkNet. These funds were raised in spite of a cryptocrash in particular and funding winter in general.

“The downturn is driven by the Federal Reserve tightening interest rates and driving de-risking across asset classes. Alameda, Crypto.com, and our other partners have been actively fostering and building the Web3 ecosystem for years. This should only strengthen the ecosystem in the long run by cleaning up the bad apples and focusing on the strongest players,” said Eduard Jubany Tur, Founder at ZKX.

The funding will go towards further development of its open-source protocol, DAO funding and growth of the ZXK ecosystem.

ZKX was founded in 2021 by Eduard Jubany Tur, Naman Sehgal, and Vitaly Yakovlev. The team has hired from Flipkart, PayTM, and Byju’s, with decades of shared experience in venture building and scaling technology startups in over eight countries.

It had earlier received investment from Sandeep Nailwal, co-Founder, Polygon, and Ashwin Ramachandran, General Partner, DragonFly Capital.

The platform aims to address some of the key challenges of the DeFi market, such as over-reliance on centralized entities, scalability, high gas fees for traders and painful user experience.

“We are determined to build an exchange that breaks down the barriers to using DeFi by building a protocol that enables trading derivatives of assets on StarkNet. Our goal is to expand our reach across emerging markets, enabling users to have fair representation within a DAO,” said Jubany.

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July 22nd 2022, 7:04 pm

Stllr Network raises six-figure investment round

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Press release:

Stllr Network closed a six-figure investment amount after a public beta launch from 500 Global, angel investors through Women Spark and Falak Angels. The list of investors includes backers from the KSA Ministry of Investment, ex-Microsoft and Oracle leaders, Accenture, Emkan and the Digital Cooperation Organisation. 

A company on average outsources up to 40% of its marketing budget. Stllr reduces wasted costs in marketing departments, and miscommunication with external vendors and gives companies a plug-and-play marketing model through experimenting with different campaigns like SEO, media buying, social media and more.

CEO Nouran Ghannam comments “there is an untapped potential of teams in the marketing industry, but the best teams are formed on their own through the network. This model is the first of its kind in the world, and only in a community-based region like ours, is it the best place to start. 34% of all experts in the network come through referrals by someone already in the network. They can build and manage their own teams through Stllr’s technology. It’s social. We doubled our talent pool in 2022 just through the network.” 

Stllr Network aspires to be MENA’s largest network of vetted marketing talent who are nominated to projects, introduced to others and access to larger projects and enterprises, unlike traditional freelancing. 

Their beta customers include a pilot with Zid and TikTok MENA, Hesas Misr, a semi-governmental initiative by almentor, Ministry of Education and Nagwa, Grinta, a collaboration with Zid and TikTok,  as well as various e-commerce stores, in Egypt and KSA. Stllr experts have success stories achieving over 1M in sales for one, and 5x monthly orders for another.

Stllr Network launched Packages for partners, giving businesses access to quick marketing deliverables with fast checkouts like company profiles or designs.

Nouran adds, “Stllr Academy wouldn’t have been possible without the support of Tanmia W Tatweer, a grant by the Arab Development Bank. We can scout talent from Stllr Academy with the network’s quality at our core.”

Stllr Network’s public beta was launched on 8th December with a rooftop launch party exclusively for its community, partners and experts. The fresh funds will be used to invest in acquiring local talents, decentralising the network and regional expansion across KSA and the GCC.

July 22nd 2022, 7:04 pm

Has the buy now pay later slump reached Mena?

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The hype around buy now pay later (BNPL) around the world has waned. Sweden’s Klarna, which last year was Europe’s most valuable fintech startup slashed its valuation from $46 billion to just $6.7 billion in its last funding round and cut its workforce by 10 per cent.  Australia’s Zip has seen its share price fall by 90 per cent over the past year and terminated its merger with Sezzle over macroeconomic conditions while US-based Affirm also saw its share price falter after Apple announced its own BNPL offering.

The rise in the cost of living and high inflation has dented consumer spending, resulting in concerns that those who do opt to purchase goods through BNPL, will not be able to maintain their payments. Regulators have also focused their attention on BNPL companies, demanding greater transparency and better affordability checks on customers.

In the Middle East and North Africa (Mena), this sentiment is not quite yet as potent. When the first few players emerged, they provided a unique offering to the market, a form of credit in a region where consumers have limited payment options.

Take up of BNPL in the region has skyrocketed, so much so that “people cannot imagine a checkout page without it”, according to Abdulmajeed Alsukhan, co-founder and CEO of Saudi Arabia-based Tamara.

“The market has been underserved for a long time, we have a unique case in the GCC where most banks have focused on corporate banking. Most of the banks were reluctant to give loans unless you worked for the public sector. They would make it very, very hard for you to access simple, small amounts [of credit],” he adds.

In the wake of the lockdowns and rise in online shopping, BNPL became a way for consumers to manage their expenses amid rising economic uncertainty and job insecurity. 

“I believe this region has now officially embraced BNPL,” says Alsukhan, adding that it has become the main payment option for 80 per cent of consumers at checkout, while research from checkout.com suggests that 50 per cent of all Mena will use BNPL this year. 

Overhyped

But for Hosam Arab, founder and CEO of UAE-based Tabby, buy now pay later has been “grossly overhyped. There has been way too much attention on the sector”.

BNPL startups were the “poster child” of fintech startups when they first emerged in the region, securing some of the biggest investment rounds in 2021 with startups in this segment raising in excess of $232 million. But as the war in Ukraine has pushed up food prices and sent inflation rates soaring, investors have become hesitant, adopting a wait-and-see approach. 

“The public markets are not looking good, tech as a whole has taken a hit, payments has taken a larger hit and BNPL has taken an even larger hit. Twelve months ago, they were the biggest gainers, but some normalisation is happening now. It’s become extremely competitive, largely driven around the hype. Some of this hype needs to die down and bring the sector back to earth,” says Arab.

So far this year, investment in BNPL startups and other fintechs that offer BNPL exceeded $100 million.

“Given the fact that markets have cooled, investor sentiment has also cooled. We will see a decent amount of consolidation in this space, players will find it difficult to raise capital to scale, it is very capital intensive to scale,” says Arab, who in March closed a $54 million Series B round led by Sequoia Capital India and STV.

Regionally, BNPL has become a “quick race to the bottom on pricing”, according to Arab who adds: “We all monetise via the merchant and merchants realise their importance to the equation and they can drive down pricing.”

This is why a few startups in the region have adopted different business models, to prevent such a heavy reliance on merchants and investors. 

For UAE-based Cashew, partnering with Mashreq bank has eliminated the need to seek out other investors. The startup, which pivoted from providing banking software to BNPL, partnered with Mashreq which invested $10 million, to launch its services through a revenue sharing model.

“The banks have been operating in this market for decades, there is something to learn from their experience, we’re stronger if we combine their expertise. Our business model is providing tech, we manage the end to end user onboarding. We prefer to partner with the bank for the balance sheet, so we make sure we never run out of banks,” says Ibtissam Ouassif, co-founder of Cashew.

Banks cannot provide BNPL in a seamless manner according to Ouassif. “If they could, they would have done it already. It’s not about the skillset, it’s about compliance and regulations. BNPL or fintech can move faster, that’s the strong suit, it’s the tech itself and the maintenance of the whole journey,” she says.

Meanwhile in Egypt, the largest BNPL market after the UAE and Saudi Arabia, one fintech is offering a “save now, pay later” model, where customers pay LE100 upfront for the option of paying in instalments. The founders, who previously worked at ValU, the BNPL offering from investment bank EFG Hermes, describe Sympl as an “evolution” of ValU. 

“We have noticed the market is influenced and controlled by the purchasing power of the people who already have funds and liquidity in their accounts,” says Mohamed El-Shabrawy El-Feky, co-founder and CEO of Sympl. “The percentage of the needy people or credit hungry people, those are the segments that all the financial institutions are competing for.”

The journey for Sympl, which last year raised $6 million, starts at the checkout, cutting back the need for marketing costs. 

“We approach them at checkout while they’re already paying for products or services they need and we give them a pay later option – save your money and pay later. If you’re charging the first instalment upfront, it’s 25 per cent of how much the customer has in their account and it is not aligned with the saving plan we want to promote,” says El-Feky.

Offering more

Given the popularity of paying in instalments, other payments companies have also launched their own BNPL offerings in Mena, including Visa and Amazon Payment Services. 

Amid the rise in competition, there is growing pressure to diversify what BNPL offers. Tabby is launching its BNPL Visa card, which will automatically allow customers to pay for goods in four instalments in brick and mortar shops listed on Tabby's platform.

“If you look at BNPL as purely a payment method at checkout, it becomes commoditised,” says Arab.To avoid this commoditisation, Tabby has introduced a cashback loyalty programme for its customers who can ascertain benefits beyond splitting payments.

Meanwhile Tamara’s Alsukhan claims his company is “going beyond BNPL”, and focusing on the overall online shopping experience."We are innovating in the discovery space, making sure you get what you need at a price you like.”

Analysing global BNPL trends can give us some insight into what might happen in the region.

“The trends are obviously increasing the product offering, consumers and merchant partners want six or 12 months repayment plans, you can do that if you have the balance sheet,” says Ouassif. “We see this trend in the US and Europe, where you offer longer tenure and when you do, you increase the ticket size and you can go into other sectors beyond fashion and retail.”

Regionally, BNPL has expanded to healthcare, education, insurance and the automotive sector.

“BNPL has taken over the e-commerce space, now we’re getting out of that landscape a bit and consumers have gone back to the stores and malls,” says Ouassif. “Retailers are asking for the solution to be in stores as well.”

The business of BNPL

In the quest to differentiate and offer both customers and merchants more than just an alternative payment method, some BNPL players are looking at the B2B segment. In Saudi Arabia, Afundy, launched in May 2021 as a Shariah-compliant, B2B BNPL fintech, offers a form of trade financing for e-commerce businesses. It purchases their stock and resells it to the online retailer who pays for it in instalments with a flat fee rate of 5 to 15 per cent.

Afundy’s technology analyses the seller’s revenue patterns and sales and marketing patterns to decide the credit-worthiness of the retailer and caters its offerings according to that.

“It is very practical and accessible, they [retailers] can integrate their accounts efficiently and get funding in three days, as opposed to banks who require two years’ of audited financial statements. They have to put in a lot of documentation that might take a few weeks or months,” says Mohammed Sabbagh, co-founder and CEO of Afundy.

Typically,e-commerce traders purchase their own stock and store it in warehouses, whether their own or one that is leased.Through a player like Afundy, “the trader doesn’t need to worry about inventory, logistics or funding. They can focus on selling online and that’s how we help them grow”, says Sabbagh.

Globally, default rates for BNPL rise alongside their popularity. A survey of the 40 per cent of Americans who had used BNPL, showed that more than a third had missed a payment while Klarna’s rate of delinquencies doubled last year. While this has resulted in millions of lost and delayed payments, the risk in the B2B space is substantially higher according to Sabbagh.

“The risk is higher in the [B2B] space, funding small businesses who have much higher chances of collapse,” he says. But given that Afundy’s model is a revenue-based form of financing, the risk is somewhat lower.

“Having access to their revenue stream, we know their data which helps us forecast what their revenue will be tomorrow, so it mitigates our risk by 99 per cent as opposed to banks who look at historical data,” says Sabbagh.

Afundy is not alone in pinning its hopes on the B2B sector. UAE-based Toggle, a B2B marketplace for the restaurant and hospitality sector has also ventured into the BNPL space by partnering with underwriters and private creditors to facilitate its financing services to its customers. Toggle Market uses credit risk modelling and banking data to offer B2B customers flexible financing solutions including up to 365 days trade credit.

Farther afield, the likes of Germany’s Mondu and Billie and UK-based Playter have attracted significant investment for their B2B BNPL offerings as valuations for the B2C players suffer.

But while investors may feel more comfortable with the B2B-focused startups, competition will likely stiffen, particularly as more B2B marketplaces offer their own BNPL offerings while the global macroeconomic uncertainty will no doubt hit this segment too. 

Carving out a niche amid the competition will become the key focus of all BNPL players in the region. At a time when “super apps” have gained traction, we will likely see BNPL fintechs offer a fuller suite of products in order to retain customers, which will make way for more exits and consolidation. 

July 22nd 2022, 7:04 pm

African growth promise tempts investors

Wamda

By Joseph Cotterill

A list of Africa’s fastest-growing companies that is topped by Kenyan tech disrupters, South African platinum miners and Nigerian commodity traders makes one thing clear: the businesses thriving in the continent’s major economies are as diverse as they come.

This inaugural FT ranking, compiled with data company Statista and based on compound annual growth rate (CAGR) in revenues from 2017 to 2020, reflects big themes across African markets, both old and new.

Miners owe their place to a traditional tailwind for African corporate growth: booming commodities. But their presence also reveals that African producers are at the forefront of enabling new clean technologies around the world — demand for catalytic converters for cars, for example, has contributed to the run-up in platinum prices that has driven revenues in recent years.

But the list is characterised far more by startups, such as the frontrunner, Kenya’s Wasoko, that are tailoring the internet’s worldwide disruption of business models to classic African sectors, such as informal trade. In 2017, about a fifth of sub-Saharan Africa’s population was online. By 2020, that had risen to just under a third, according to the World Bank.

While the ranking does not extend beyond revenue growth to the cost of sales, or to profitability, Africa’s markets represent a more battle-hardened environment for fast-growing companies than other regions.

When raising funds, African startup founders often say that they face greater pressure to show a path to profit earlier than companies in other parts of the world because their markets are considered less familiar to international investors.

And they are clearly doing so, as venture capitalists and other investors are coming to African markets with bigger cheque books than ever before. Evidence suggests more capital is finding its way to start-ups at later stages, when they are already approaching significant scale.

Last year marked an explosion in funding for fintech, in particular. African startups raised about $5 billion in private markets, notably in venture capital, in 2021, according to data and estimates from the African Private Equity and Venture Capital Association (AVCA), an investor representative group, and Briter Bridges, a research firm.

While that was a sliver of the $600 billion raised worldwide, it was more fundraising than had been achieved on the continent in the previous seven years combined, according to AVCA.

By the number of deals, the more than 600 transactions recorded by the body last year were nearly 10 times 2014’s total.

More than a dozen companies raised $100 million or more in 2021, compared with three in 2019 — supporting the idea that increasing amounts of capital are reaching startups when they are already nearing notable scale.

Almost all could be classed as fintech, and some, such as Flutterwave and Opay, both Nigeria-based digital payment companies, broke through to “unicorn” billion-dollar valuations with these funding rounds.

Wasoko, the top company in this ranking, came close to joining them. It raised $125 million, at a valuation of $625 million (although the company was ranked on CAGR to 2020). Opay’s $400 million round alone was larger than the entire African startup market’s fundraising in 2017.

However, even with this recent surge in investment, “there remains too little capital and talent, when compared to the strong demand for both from the many entrepreneurs building the next generation of world class African companies,” according to the AVCA.

One emerging talent bottleneck for high-growth African startups is the number of professional software developers on the continent, which has been estimated by Google at about 716,000, nearly half of whom are in Egypt, Kenya, Nigeria and South Africa. The average age of these developers, at 29, is younger than the global average of 36. One-third are under 25.

At the current rate of venture capital dealmaking, it is a fair bet that next year’s list will feature many more tech groups. But the ranking also reflects how capital markets beyond Africa have been swayed by companies from the continent. Revenue growth at South Africa’s Naspers (number 37 on this list and the continent’s biggest company by market capitalisation) reflects its stake of just under a third in China’s Tencent, and other international internet assets that are now housed in Prosus, its European investment vehicle that was created in 2019.

A few rungs up the list is IHS Towers, the continent’s biggest independent mobile phone mast operator, benefiting from a boom in the infrastructure needed for Africa’s surging internet use. IHS listed in New York last year in the biggest initial public offering by an African company on US markets.

Especially striking is heavy representation for South African miners of platinum group metals, of which the country is a large world supplier, including Northam, Royal Bafokeng and Anglo American Platinum.

That reflects the nature of a revenue-based growth ranking — miner sales in recent years have been boosted by surging platinum prices and depreciation of the South African rand, in which many costs are priced, relative to the US dollar.

It is a volatile mix. In 2020, the last year used for this ranking, the average platinum price was $885 per ounce — but this concealed highs of about $1,070 and lows of around $605. Palladium prices were just as wild, ricocheting between $2,800 and $1,600 per ounce beneath a 2020 average of $2,200.

Even though analysts point to signs of a maturing cycle, such as rising costs, mining executives insist that long-term demand for platinum is here to stay, given lack of supply and the requirement for the metal in clean energy technologies — producing fuel cells, for example.

“There is a systemic global primary supply problem, and it boils down to the scarcity of new mining projects to replace the depleting profiles of currently operating, mature mines,” said Paul Dunne, Northam’s chief executive, in March.

The platinum mining boom also shows that, while the ranking methodology stresses that it is tilted to “primarily organic” growth, expansion through acquisitions is important, too. In recent months, Northam has built a stake of around a third in Royal Bafokeng during a bid battle with Impala Platinum, another miner. Sibanye-Stillwater, a South African platinum miner that is not on this list, tripled revenues from 2018 to last year as it made deals including an entry into battery metals.

M&A-driven growth could also become part of the lifeblood of Africa’s biggest fintech startups, both on and off this ranking.

MFS Africa, a South Africa-based digital payments gateway, pulled off one of last year’s $100 million-plus fundraising deals. It has also been highly involved in pan-African M&A, making two large acquisitions to expand in both west and east Africa, as well as three minority investments, over 2020 and 2021.

Deals such as those by MFS “are critical building blocks in building an expansive fintech infrastructure business on the continent”, because of the importance of scale in payments, Renaissance Capital analysts said last month.

“We think the trend of consolidations in the ecosystem is likely to continue, spurred on by access to venture funding, with fintech companies leading the charge,” they added.

Copyright The Financial Times Limited 2022

© 2022 The Financial Times Ltd. All rights reserved. Please do not copy and paste FT articles and redistribute by email or post to the web.

July 5th 2022, 9:37 pm

UAE's LYVE acquires majority stake in Jeebly

Wamda

Press release 

Lyve Global is a B2B logistics SaaS platform founded in the UAE, enabling businesses to digitize their customer journey from order to payment to delivery. The company has recently acquired a majority stake in Jeebly, a leading UAE-based last mile delivery and logistics company.

Lyve’s acquisition of a majority stake in Jeebly marks a significant step as part of the company’s new investment strategy, which aims to expand its offerings and market reach. 

Lyve has flourished since its inception in 2016, evolving into an end-to-end solutions provider. The company now uses cloud-based platforms and services to help facilitate hundreds of millions of orders every month on behalf of leading brands across the e-commerce, food and beverage, grocery, and healthcare industries.

By leveraging Lyve’s rich network, the acquisition will help to further accelerate Jeebly’s growth in its existing markets while also strengthening its operational capabilities to offer unique delivery solutions across the GCC.

Chief Investment Officer at Lyve, Nader Museitif, commented on the strategic investment: “This is an exciting time for us. In less than 12 months we have concluded 4 acquisitions. We have ambitious plans for the coming two years with total investment value reaching over $150 million.  Jeebly has been an exceptional success story and we’re happy to be working together on the next stage of the journey.  This is one of several investments that will complement our offering and we will be actively looking to acquire companies that add to our spectrum of services.”

Jeebly has experienced fast growth since it was first established in 2016 by Raman Pathak and Ram Parashar, with the help of their main investor, Axeed. In just 6 years, the company has onboarded more than 500 key global and regional clients across multiple industries. With this latest investment, Jeebly is well on track to accelerate its growth.

Raman Pathak, Chief Executive Officer and Co-Founder of Jeebly said: “We are excited to welcome Lyve Global as our growth partner. This is an alliance that is set to strengthen our proposition and create unique synergies that will benefit our customers. Together, we will be more resilient and prepared for future opportunities”.

Abdulla Al Shaibani, Chief Executive Officer, Axeed LLC also commented on the partnership: “Lyve Global and Jeebly joining hands is an excellent strategic development that benefits all parties involved. We at Axeed have always believed in Jeebly's potential and will continue to actively support this partnership."

With the rapid rise of e-commerce in the region, companies are focused on developing strategies that enhance online trade. Lyve’s solutions play a pivotal role in empowering such companies to thrive in the digital landscape, having successfully expanded its offerings to cover order generation and management, payments, and delivery across 20 markets. With this growth comes the desire to continuously refine and advance its services, backed by major regional investors and institutions.

July 5th 2022, 9:37 pm

Supy raises $8 million Seed round

Wamda

Source: Waya

Supy, UAE-based B2B food marketplace, raised $8 million in a Seed round led by BECO Capital with participation from Valia Ventures and COTU Ventures, Global Ventures and AMK Investment Office.

Supy was co-founded in February 2021 by Dani El-Zein and Ibrahim Bou Ncoula, and works on digitizing the communication process between restaurants and suppliers.

Their software is available on the web and mobile and helps restaurants improve profit margins by providing them with insights on their purchasing trends at both an ingredient level and a supplier level. 

The startup aims to use the capital to invest in further bolstering its tech, strengthening its product offering, scaling out its KSA presence, and launching its settlement and payment solution to help suppliers reconcile invoices while allowing restaurants to better manage their payables and cash flow.

“We are on a mission to become a global leader in this space, and our growth since our pre-seed funding round is a testament that we are on track with the right set of partners. KSA is the perfect location for our first international expansion outside the UAE and into the global market. Supy was created to solve a crucial problem for one of the most dynamic industries, and we can’t wait to expand our software offerings to our customer base,” Dani El-Zein, Co-Founder and CEO of Supy, stated.

July 5th 2022, 9:37 pm

Qatar fintech Karty raises $1.2 million pre-Seed

Wamda

Press release 

Qatar-based FinTech platform Karty has raised $1.2M (QR4.3M) in a Pre-SEED round from Visa, Qatar Development Bank (QDB), Qatar Foundation, and Qatar based angel investors. The Msheireb-based FinTech aims to revolutionize the daily financial experiences for its customers by leveraging cutting-edge technology and transaction data. It is working closely with strategic partner Visa to deliver full digital payment solutions for both consumer and business expenses

The FinTech app is supported by Qatar Fintech Hub (QFTH) and Qatar Financial Center (QFC) as well as Visa, QDB and Qatar based angel investors through investments and innovation grants. 

Qatar Foundation is supporting through its innovation coupon programme. Co-founder Abdulaziz al-Marri,  commented, "We can’t wait for consumers and businesses to see and feel the benefits that KARTY will provide them. Such as peer-to-peer payments that will allow users to instantly send and receive money to other KARTY customers, interactive charts that will show daily spending, and allow them to track spending with automatic categorisation or edit transactions manually. All wrapped up in a secure, low-cost, and contactless financial tool."

Ibrahim Abdulaziz al-Mannai, executive director of Advisory at QDB, shared his thoughts on the investment, “QDB collaborates with the Qatar Central Bank to ensure a seamless execution of the national fintech strategy that will boost Qatar’s positioning as a central hub for business in the Middle East. Therefore, we established QFTH to be able to provide a valuable programme that is capable of attracting and supporting local and international fintechs."

According to Qatar Foundation, investing in startups and entrepreneurs whose innovative ideas benefit the society are a priority for it.

Dr Azza Altawashi, Investment and Business Development Manager at the foundation, added, "In addition to funding, QF’s innovation coupon provided KARTY with technical support and guidance that helped them further develop their offering – the first digital wallet app in Qatar with features on savings and financial awareness benefits – and take it to the market.”

 

July 4th 2022, 1:08 pm

Digital banking YAP raises $41 million in funding

Wamda

Source: Zawya

Dubai-based start-up YAP, which operates a digital banking app, has raised $41 million to fund its expansion in the Middle East, Africa and South Asia.

The new investment came from Saudi Arabia's Aljazira Capital alongside other investors including Abu Dawood Group, Astra Group and Audacia Capital, the company said in a statement on Monday.

The fintech firm launched last year a digital banking platform, which now has more than 130,000 users. The app provides a complete view of a consumer's spending analytics and ways to transfer money, pay bills and make purchases. Users are not required to maintain a minimum balance in their accounts.

The start-up intends to complete its Series A funding by the end of the year and use the new capital to support its expansion and growth in Saudi Arabia, Egypt, Pakistan and Ghana.

It said it has partnered with Bank AlJazira to launch its consumer and business platforms in Saudi Arabia and received regulatory approval in Pakistan and Ghana to offer similar services. It also plans to launch in Egypt soon.

July 4th 2022, 1:08 pm

Anghami acquires live events management company Spotlight

Wamda

Press release:

Anghami Inc. (Anghami) (NASDAQ: ANGH), the leading music and entertainment streaming platform in the Middle East and North Africa (MENA) has announced the acquisition of Spotlight Events, an event and concert company specialized in managing and executing live events and concerts in the region.

The partnership will see Spotlight Events become Anghami's arm for live events and concerts, including offline activities and activations to further expand Anghami's footprint in the music and entertainment ecosystem while unlocking synergies and opportunities between the physical and digital worlds.

While Spotlight Events will provide a stage for artists to perform and reach their audiences offline, Anghami's technology will bridge the gap between the offline and online worlds by providing access to exclusive concerts through its live video streaming capabilities and creating immersive experiences through AR and VR. The strategic partnership will enable Anghami to unlock opportunities between artists and brands, enriching music fans' experiences with exclusive access to private concerts, VIP lounges, meet & greets and backstage access, in addition to attending concerts either offline or streamed through their devices. Traditional and virtual concerts will be accessible either through tickets or sponsored by brands.

Eddy Maroun, Co-founder and CEO of Anghami commented: “Our vision is to expand from music streaming to a fully integrated entertainment platform that meets our goal of building our own unique category that no other provider can compete with. This partnership will allow us to deliver unique experiences to our users while giving artists a stage to perform and reach their fans physically and virtually. Spotlight and Anghami Lab are among a number of initiatives we plan to develop new business extensions to accelerate our growth and improve our margins while widening the gap with our competitors. Maher has built a great business on solid economics and has proven that live concerts and events are a scalable and profitable business.”

Spotlight Events has recently confirmed its program of upcoming concerts and events in Dubai, Abu Dhabi, Paris, Cairo and Riyadh, including "Beat the Heat", a 7-concert festival organized in collaboration with the Department of Tourism and Commerce Marketing - Dubai (DTCM). Also in Abu Dhabi, 6 concerts are planned for the rest of the year, to be announced at a later date. Also on the schedule is the much anticipated live concert by the Arab superstar Wael Kfoury in Paris. Spotlight will also be executing all of Anghami's events, including "Amr Diab Live" and other major surprises to be unveiled soon.

Maher Khawkhaji, Founder and CEO of Spotlight added: “Anghami is the largest music platform in the MENA region with an incredible number of users and a unique network of partnerships that, once connected to Spotlight, will open doors to amazing opportunities. Our offline expertise, complemented by Anghami's reach, data and technical capabilities, is the perfect recipe for success. We look forward to being part of this dynamic team and unleashing the incredible potential to bring the best to music fans, artists and brands and take entertainment to the next level.”

The announcement follows Anghami's recent IPO on Nasdaq as the first Arab tech company to list on the U.S. stock market and the unveiling of an all-new brand identity to support the next phase of growth for the company, which is evolving from a music streaming platform to an entertainment platform.

July 4th 2022, 1:08 pm

Saudi Arabia’s AlGooru raises $1.8 million Seed round

Wamda

Press release:

KSA-based edtech AlGooru raises $1.8 million in Seed funding with the participation of RAZ Group, RZM Investment, 100 Ventures, RAY Investment, and esteemed angels from Oqal Angel Investors. Founded by Khalid Abou Kassem, AlGooru was launched in 2021 to build an online platform that harmoniously connects students with a pool of competent private tutors on-demand. The platform provides ease, diversity of offerings, and seamlessness. It offers students a facilitating method of connecting with specialized tutors: 3 simple clicks. AlGooru’s app is currently available in both stores.

AlGooru aims to further connect with a wider network of partners that will allow the exchange of best practice knowledge to improve. The platform targets an A-class team of talents that is focused on changing the game for the private tutoring arena. As one of the founding members and the Head of Product, Omer Awad, describes: “Technology is the future, and adapting to the constant high-tech novelty will transform education. Our team is rapidly expanding and through the wealth of data that we’ve accumulated, we know what the market needs and how we can capitalize on it.”

The funding will allow AlGooru to widen its scope and expand its growth in the edtech kingdom. AlGooru’s founder, Khalid Abou Kassem, commented on this milestone by saying: “While edtech is lucrative, it's still an unattractive industry for many in our ecosystem. Deal numbers can justify this. But we’re changing that. All while building a solution that will modernise and upgrade how complementary education is delivered in our region, one step at a time.”

July 3rd 2022, 1:07 pm

Fuelin: enabling fleet managers in Egypt to cut fuel costs

Wamda

Increased digitisation in Egypt and the rise in smartphone adoption has pushed the demand for transportation services, whether this relates to the movement of people, goods or shipping parcels to consumers. Amid record-high inflation and fluctuations in the price of oil, reducing operational costs has become a top priority for logistics companies that operate  their own fleets.

The past few months saw the emergence of several initiatives by private sector companies as well as logistics startups to lessen dependence on oil and switch their fleets to electric vehicles. But, the majority of commercial vehicles still largely run on diesel fuel. According to the Regional Centre for Renewable Energy and Energy Efficiency (RCREEE), diesel dispensers consume 3.7 million tonnes of diesel every year, releasing over 10 million tonnes of carbon emissions. 

Fuelin, is one startup that enables companies to reduce operating costs by bringing down fuel usage. Through Fuelin, fleet managers can track and monitor fuel consumption and be notified in case of overconsumption or faulty transactions.

The startup deploys optical character recognition (OCR) reading capabilities that can recognise the reading on the fuel dispenser and translate it into a digital text.

Armed with operational data and insights, drivers, on the other hand, can get insights regarding their vehicle and the amount of fuel needed to transport inputs, depending on its type and the routes they cover, as well as making it easy for them to find the nearest gas station to their locations.

"For fleet managers, fuel costs are a huge expense given that they take the biggest bite of their budget. Businesses with fleets spend approximately 50-60 per cent of their annual revenues on fuel. When this is left unmonitored, it is a recipe for compounding losses," says Mohamed Hussein, co-founder and CEO of Fuelin.

Drawing on his past experience as a fleet manager, Hussein recounts that the process of collecting fuel-related data has only involved the use of excel sheets. This has, in turn, allowed for mishaps and several "fuel fraud incidents", as he puts it. 

"The fuel funds allocated by companies can sometimes be exceeded or misused and fleet managers cannot really dissect the reasons behind this. The way the fuel data is gathered is through comparing paper fuel receipts against mileage. This unreliable method causes multiple fraud cases, including drivers performing double or multiple transactions to one receipt or filing fake receipts," Hussein explains.

The startup's clientele ranges from gas stations and businesses with fleets from across the board, but it tends to mostly cater to e-commerce and last mile companies. Moreover, it also has plans to onboard ride-hailing companies. 

"In Egypt, commercial vehicles represent 6 per cent of the transportation industry. Therefore, they account for 6 per cent of the total energy consumption. The tide remains strong as the demand for logistics services continues to soar," says Hussein. 

He adds: "In ride hailing, [we] found out that drivers prefer rides paid in cash so they could use the money to get fuel. Over the past period, we were working on fostering partnerships with ride-hailing companies and having their drivers use our solution. That way, drivers can use 50 per cent of the money they would collect through our app to refill tanks from the gas stations that we work with."

Currently, Fuelin works with 12 gas stations, and is in the process of raising its pre-Seed round to cover more gas stations inside Egypt as well as onboard more corporate clients. Hussein further explains that the biggest challenge confronting his business is the need to accelerate its expansion.

"That's one key hurdle standing in the way of acquiring big multinational companies with larger vehicle fleets. That's what we are heavily focused on in the meantime. All in all, we decided to ditch the cold-calling approach and aim for partnering with companies that own gas stations," he adds.

Recently, the startup has partnered up with Ola Energy, an affiliate of Libya Ola Holdings. The alliance will enable Fuelin to have a presence in the company's respective filling stations in Egypt as well as in Africa. 

 

July 3rd 2022, 4:52 am

Careem acquires money transfer technology platform Denarii

Wamda

Press release:

Careem announces the acquisition of the assets of Denarii, a Dubai-based money transfer platform that integrates fintechs and financial institutions with remittance aggregators, banks, exchanges and wallets globally. Some key members of the Denarii team will also be joining Careem.

Founded in 2019 by Jon Santillan and Walfrido Perez, Denarii’s proprietary money transfer technology uses a single API call to enable fintechs like Careem Pay to facilitate quick and affordable international money transfer. Denarii also helps businesses build secure profit centres by automating accounts payable and B2B payments.

Careem Pay will use Denarii’s money transfer technology to connect customers and Captains with remittance services provided by licensed providers. Careem already has a large presence in countries connecting some of the most active remittance corridors in the world, such as the UAE, KSA and Pakistan.

Careem Pay offers a digital wallet that stores real money for customers in the UAE as well as a peer-to-peer (P2P) transfer product that enables customers to send, request and receive money using just a phone number, personal QR code, or personal payment link. Seamless access to  international remittance services will round out Careem Pay’s payments offering for customers and Captains to address their everyday financial needs.

Mudassir Sheikha, CEO and co-founder of Careem, commented: “We’re thrilled to acquire the assets of Denarii, a startup that is transforming the way people move money across the world. Denarii’s innovative API will accelerate our journey to offering simple and affordable international remittance services, adding to the wide variety of services already available through Careem Pay.”

Jon Edward Santillan, CEO and co-founder of Denarii, said: “Careem’s large network of customers, Captains and merchants, and decade of payments processing experience, will enable us to increase the impact of the money transfer technology we built through Denarii. Careem has done more than any startup in the region to simplify and improve lives and we’re excited to join the team to increase economic freedom for millions of people.”

The GCC is home to some of the largest remittance corridors in the world. Remittances to the developing countries of the Middle East and North Africa region grew by 7.6 percent in 2021 to $61 billion while remittances to South Asia grew 6.9 percent to $157 billion in the same year. Digital financial services have an enormous total addressable market - valued at $2.8 trillion across payments, lending, GCC remittances, and financial services products including insurance.

Careem Pay is simplifying payment experiences by making it easier for customers, Captains, and merchants to hold and transfer money, pay bills, and make and accept payments both on and beyond the Super App. 

In the UAE, the Careem Super App offers more than a dozen services including ride-hailing, food and grocery delivery, micro-mobility, digital financial services, and partner services including car rental, home cleaning and PCR testing. 

 

July 1st 2022, 8:06 am

Pure Harvest secures $180.5 million from global investors to fund expansion

Wamda

Press release:

Pure Harvest Smart Farms (Pure Harvest), a world-leading, sustainable technology-enabled agribusiness headquartered in the United Arab Emirates, raised USD $180.5 million in their latest growth funding round. The financing was embraced by a consortium of key global investors, including Metric Capital Partners, UK, IMM Investment Corp, Korea, and Olayan Group, KSA, joined by several existing investors and management. The company will utilise the capital, together with various forms of debt financing, to invest in research and development, to expand its footprint across the GCC, and to open new markets in Asia. 

This represents the largest-ever convertible financing in the MEASA region. The funding round was vastly oversubscribed, and a few strategic investors are still in discussions for further upsizing, underscoring the strong institutional investor appetite for Pure Harvest. The growth capital cements Pure Harvest’s role as the MEASA region’s champion within the fast-emerging, global high-tech agriculture ecosystem. 

Sky Kurtz, Co-Founder and CEO at Pure Harvest Smart Farms, said: “We are humbled by this investment from an esteemed group of global investors, backing our mission: to harness the wonders of science, the power of nature, and the passions of people to provide tasty, affordable, sustainably-grown fresh produce anywhere. At Pure Harvest we have demonstrated we can reliably deploy our high-tech farming solutions across the GCC. Now it is time to enter new markets that share similar challenges to our own – fast-growing populations, seasonal import-dependence, and an awareness of the crippling effects that short-term crises (e.g. COVID-19, Russia-Ukraine conflict), and climate change, are having on our global food system. The future of farming is here… now, we have the resources to bring our solution to the world.”

Metric Capital Partners, the London headquartered, pan-European private equity investor providing capital solutions to mid-sized companies across a wide variety of industries, was a co-lead investor. Bjørn Tessiore, Partner at Metric Capital Partners said: “We are delighted to support the continued growth of Pure Harvest. It’s clear that controlled-environment agriculture is becoming increasingly important as a solution to food security issues while also mitigating the environmental impact of food production. We believe Pure Harvest is extremely well positioned to thrive in this growing market driven by its excellent team, innovative approach, and proven track record of building and operating at scale in a region characterised by difficult climatic conditions for agriculture.” 

Commenting for IMM Investment Corp, the leading alternative investment firm in Korea, who announced an initial USD $50 million investment in Pure Harvest in October, Hyun-Chan Cho, Partner at IMM commented: “Due to our longstanding successful investment in Farm8 (PlanTFarm), we knew the CEA space well. With Pure Harvest, we saw a complementary solution that let us double-down on an investment thesis that we continue to believe in, and that tangibly contributes to global food security, water conservation, economic diversification, and sustainability objectives. We are proud to actively support Pure Harvest as it brings its solution to Asian markets.” 

The Olayan Financing Company, a Saudi company holding and managing the Olayan Group’s Middle Eastern assets, was another key investor in this round of fundraising. A spokesperson for the company, discussed their recent investment: “Pure Harvest’s character aligns closely to our own: they saw an impending global food security crisis and have taken an important step to solve it.  The climate and water challenges Pure Harvest works to overcome is vital to the global economy.  Pure Harvest has proven its ability to deliver incredibly high-quality, safe, sustainable products at affordable prices, and they’ve shown an openness to partner with others to achieve their mission.  I believe this funding will allow them to unleash significant potential, and to meet growing food demands in many new markets.  We are pleased to be joining the company at this critical point in their journey, transitioning from a regional leader to a global one.”

This latest round of fundraising cements Pure Harvest’s leadership position as the pioneer in CEA in harsh climates. This fundraise, together with the sizable research and development incentives secured from the Abu Dhabi Investment Office in 2020, will allow Pure Harvest to accelerate its growth plans, deploying growing systems in new markets and increasing research and development investments. The company is also investigating a number of new growth initiatives, including product extensions and water-efficient CEA solutions for fodder production. 

Citigroup served as exclusive financial advisor to Pure Harvest.

 

June 30th 2022, 5:20 am

KBW Ventures invests in Eclipse’s $40 million Series B round

Wamda

Press release 

Eclipse Foods, the leader in sustainable, plant-based dairy products that are indistinguishable from conventional dairy, announces a Series B funding round of over $40 million led by Sozo Ventures with participation from leading funds, including Forerunner Ventures, Initialized Capital, Gaingels, and KBW Ventures. With the latest round of funding, Eclipse has raised over $60 million to date with investors including Seth Goldman, the Chairman of Beyond Meat and Founder of Honest Tea; Alexis Ohanian, the Founder of Reddit; Prince Khaled bin Alwaleed, green tech venture capitalist; and Y Combinator, the world’s top tech accelerator. The new funding will fuel the rapid growth of the business in retail and food service, accelerate R&D on Eclipse’s proprietary plant-based dairy platform, build the brand’s world-class team, and drive awareness for Eclipse as the world’s first true dairy replacement. 

“The number one reason consumers avoid plant-based dairy is taste. As self-proclaimed ice cream lovers, our team at Sozo Ventures recognized that Eclipse’s ice cream is in a league of its own after just one bite,” said Bob Roe, Vice President of Narrative Development at Sozo Ventures. “70% of the world’s population is lactose intolerant and with the alternative protein space projected to grow to $1.4 trillion by 2050, Eclipse is positioned to completely transform the dairy industry with its proprietary plant-based dairy platform.” 

The Oakland-based brand was co-founded in 2019 by James Beard-nominated chef, Thomas Bowman, and alternative protein expert, Aylon Steinhart, with the mission to create a more sustainable, healthy and humane food system. Since then, Eclipse has scaled faster and more efficiently than competitors in the space, thanks to its plant-based dairy platform which uses a blend of non-GMO plants, including cassava, corn, and potato, to create virtually any plant-based dairy product, from cheeses to spreads to desserts, that replicate the taste, texture and functionality of traditional dairy.

“With 10 billion people to feed by 2050, we recognized that global diets must change,” said Aylon Steinhart, Co-founder and Chief Executive Officer of Eclipse Foods. “Consumers want more than just a dairy alternative like almond milk—they want a true replacement. Our plant-based dairy platform uses micelles (the microscopic magic of milk) to create the replacement products that consumers have been craving, and our growth over the last three years is a testament to that.” 

Year over year, Eclipse has grown its retail presence by 2100%, with Whole Foods Market, Albertsons, Vons, GoPuff and many other retailers stocking its pints. The brand is also dramatically expanding its food service partnerships, working with restaurants, burger chains, ice cream shops, stadiums, and more. Eclipse most recently announced its partnership with Smashburger, launching the first nationally available non-dairy milkshakes at a fast-casual restaurant chain and  the first plant-based menu item for the restaurant. 

June 29th 2022, 9:50 pm

School of Humanity raises Seed round

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Press release 

UAE's School of Humanity, an online High School, has closed a SEED round by Education in Motion (EiM), an education provider based in Singapore. In addition to growth capital, the EiM investment includes strategic human capital resources that will enable the School of Humanity to broaden and deepen its core capabilities. 

Founded by education entrepreneur Raya Bidshahri, School of Humanity offers high school learners from around the world the ability to develop the skills, mindsets, and behaviors they need to be ready for the future of work, and contribute to collective human progress and flourish in individual life. The online four-year High School, along with its Summer School and After School offerings, center on interdisciplinary learning pathways focused on global learners solving real-world problems in a collaborative, project-based, and personalized way. The model is based on research from the World Economic Forum and OECD and integrates proven pedagogies including challenge-based and mastery-based learning.

The COVID-19 pandemic has propelled the global introduction and adoption of progressive education models at every level of online, hybrid, and offline schooling. For many, the pandemic exposed severe fault lines in more traditional education systems, including an inability to transition effectively to a digital-first world, and a lack of relevance due to changing work demands and learning preferences among today’s youth.

EiM co-Founder and Chief Collaboration Officer, Karen Yung, commented: “Our investment in a strategic partnership with School of Humanity is a critical step in our quest to build a portfolio of innovative education brands empowering the next generation of young people with the knowledge, skills, and motivation to make a difference for society and the planet, given the ever-accelerating rate of change. School of Humanity’s innovative pedagogy and online-first engagement models are completely aligned with that task and our vision for the future of education.”

School of Humanity has drawn significant interest from governments, foundations, and corporations looking to provide young people with a supplemental or alternative path to traditional education. Founder and CEO Raya Bidshahri noted, “The EiM strategic partnership and investment are a further endorsement of our mission and our innovative methods, and will enable us to quickly translate our early momentum into significant near-term scale. Our two organizations are completely aligned regarding what the world and our young people need from education today, and that is to become future-ready.”

June 29th 2022, 9:50 pm

DIFC launches Open Finance Lab

Wamda

Press release

Dubai International Financial Centre (DIFC), the leading global financial centre in the Middle East, Africa and South Asia (MEASA) region, today launched the region’s first Open Finance Lab, heralding a new era of finance in the region.

The Open Finance Lab initiative is a six-month programme that will commence on 28 June 2022.

A total of 4 banks and a FinTech company are scheduled to participate in the programme, including Commercial Bank of Dubai, First Abu Dhabi Bank, Mashreq Bank, National Bank of Ras Al-Khaimah and Zand. Use cases will be explored and developed from July to November 2022, and the lab will conclude with a demonstration of the impact achieved to government officials and bank executives.

The launch of the region’s first Open Finance Lab follows the recent signing of a Memorandum of Understanding (MoU) between the Central Bank of the UAE (CBUAE) and DIFC Authority to promote the development and growth of the UAE financial technology sector. The initiative supports DIFC’s ongoing efforts to realise the objectives of its 2030 strategy by unlocking strategic opportunities for the UAE and reinforcing DIFC’s leading position as a global financial services hub.

With the overarching vision of the UAE to become a global benchmark in Open Finance, the lab will work -in collaboration -with banks, FinTech, regulators and the industry. It has the potential to unlock the next wave of growth for the sector and increase consumer protection, financial inclusion, social benefits, and economic opportunities.

In addition, the lab will run business and technical deep-dive workshops, facilitate industry and regulatory forums on important issues. These include API standards and consumer consent management, and educational sessions to promote a greater understanding of how the Open Finance data will create more opportunities through the application of emerging technologies; resulting in new data-driven innovations and business models that will enhance the future of the financial system. The insights and learnings from the use cases and forums will contribute to the development of the sector and regulations.

Additionally, the DIFC Innovation Hub will host an Open Finance Week in September 2022, creating further opportunities for the industry to engage and share their expertise and respective learnings with each other.

Commenting on the initiative, Arif Amiri, CEO of DIFC Authority, said: “Launching the region's first Open Finance Lab reaffirms DIFC’s commitment to driving the Future of Finance and provides a framework to move the country towards an Open Finance economy. The evolution of data-driven business models that make finance more inclusive, accessible, and competitive can generate significant new opportunities and open the door for a wave of financial innovation in our region and across the globe.”

Powered by Tarabut Gateway, the first UAE-based platform fully authorised by the Dubai Financial Services Authority (DFSA) for Open Finance activities, the initiative will serve as a testbed to showcase the positive impact of Open Finance on businesses, customers, and the economy, and can help inform policymaking and infrastructure with empirical evidence and industry feedback. Participants will receive complimentary guidance from trusted technical providers to support the implementation of use cases.

Abdulla Almoayed, CEO of Tarabut Gateway said: “We are honoured to have been selected by DIFC as the platform partner for the region’s first Open Finance Lab. The support we have received from UAE financial regulators is testament to the UAE’s drive towards building the future of finance and establishing its presence as a leading global FinTech Hub. We are committed to contributing to the country’s vision and look forward to collaborating across the ecosystem to further drive the Open Finance movement forward.”

Open Finance provides a platform for financial services providers, with the consent of consumers, to come together and provide data using Application Programming Interfaces (APIs) for pooling and sharing data as part of a collaborative ecosystem. It is based on the principle that financial data created and supplied by an individual on financial services, such as mortgages, savings, insurance, or consumer credit, upon their consent can be shared with trusted third parties to allow tailored products, services, and customer experiences as well as unlock operational efficiencies and enhanced security.

In November 2021, the Central Bank of the UAE (CBUAE), the Dubai Financial Services Authority (DFSA) of the Dubai International Financial Centre (DIFC), the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), and the Securities and Commodities Authority (SCA) jointly issued 'Guidelines for Financial Institutions Adopting Enabling Technologies'. The guidelines set out cross-sectoral principles and best practices for financial institutions when adopting enabling technologies for the development or offering of innovative products and services, to promote the safe and sound adoption of these technologies by financial institutions across the UAE, so that the risks arising from the adoption of innovative activities are proactively and appropriately managed.

June 29th 2022, 12:18 am

Fintechs face reckoning as easy money dries up

Wamda

By Imani Moise, Siddharth Venkataramakrishnan and Joshua Oliver

As a wave of fintechs rode successive funding rounds to ever-higher valuations over the past five years, Swedish buy now, pay later company Klarna declared its ambition to become the Ryanair, Tesla and Amazon of the sector.

But now as central banks raise rates in a fight against surging inflation, Klarna is trying to raise fresh cash at less than half its peak $46 billion valuation and fintechs are having to come to terms with a world where expansion can no longer be fuelled by cheap money and business models must be demonstrated by profits.

A record amount of investment poured into fintech companies in 2021, but many now struggle to raise fresh funds and are discussing selling themselves or accepting lower valuations to stay afloat, according to investors, analysts and executives in the industry.

On Thursday, payments services provider SumUp raised cash at a valuation of €8 billion — significantly below the €20 billion valuation mooted earlier this year.

And as belts tighten, a fintech’s chances of survival may be measured by the amount of cash sitting on its balance sheet. “You are in panic mode if your runway is less than a year,” said Erik Podzuweit, founder and co-chief executive officer of German investment app Scalable Capital.

Venture capital firms more than doubled their investments in the sector last year to $134 billion, helping fintech valuations outperform any other tech subsector, according to Crunchbase data. Funding peaked in the second quarter of 2021 as investors such as Accel, Sequoia Capital, SoftBank and Berkshire Hathaway backed groups including Brazilian digital lender Nubank, German broker Trade Republic and Amsterdam-based payments company Mollie. Financial services companies accounted for roughly $1 out of every $5 in venture capital investment last year.

But now public fintech valuations have collapsed even faster than they climbed as funding slowed sharply in the first quarter. Fintech valuations have had a steeper decline than any other technology sector, according to a recent report by Andreessen Horowitz partners, which cited data from Capital IQ. Valuations fell from 25 times forward revenue in October of 2021 to four times in May.

Fintech fundraising in the most recent quarter dropped 21 per cent to $28.8 billion from the record high of $36.6 billion reached in the second quarter of last year, according to CB Insights.

“It was easy for funds that raised a tonne of money to say, ‘oh, we’re just going to double the valuation’ . . . it doesn’t necessarily follow company performance,” said Jonathan Keidan, managing partner of Torch Capital, which has invested in fintechs such as Acorns and Compass. “The effects will be public by the fall.”

Many fintech companies raised capital at lofty valuations based on ambitious growth targets, said Arjun Kapur, managing partner at Forecast Labs. “With all the market changes, most of them are not going to hit the goals they signed up for, which means the business is not worth what it raised.”

Though he expects the sector will bounce back over the long term, “many businesses will get squeezed out in the process”.

Investors have grown particularly sceptical of consumer-facing digital challenger banks as high inflation lowers how much people can save and increases the likelihood of defaults. Funding to banking fintechs plunged 48 per cent to $4.4 billion in the first quarter compared with the same period last year, according to CB Insights.

Robert Le, fintech analyst at PitchBook, said that a bifurcation in funding was likely, as consumer-facing fintechs struggle while those selling software to other businesses will prove more stable. Among those is UK cloud banking fintech Thought Machine, which doubled its valuation to $2.7 billion in its latest funding round in May.

Meanwhile, executives such as Yorick Naeff, chief executive of Dutch broker Bux, are considering postponing planned fundraising rounds. “These companies, including us, should focus more on the path to profitability,” he told the Financial Times. “If you are organised in a way that is just focused on growth . . . you are going to run into trouble.”

Many consumer fintech companies in the US had started to dial back their marketing budgets in an attempt to conserve cash, said David Sosna, chief executive of Personetics, which provides marketing insights for the banking industry. “We definitely see some [clients] saying, ‘OK, maybe we need to stop or slow down.’”

Bankers are advising companies to conserve as much cash as possible to ride out what will probably be a difficult two years for fundraising.

“When you factor in the time it takes to raise a round, you probably need 30 to 36 months runway so you’re not forced back to the market,” said a senior banker at a US commercial bank. Only extremely strong companies would be able to raise even at the same level as last year, the person added.

Freetrade, the UK broker valued at £650 million in November, raised £30 million through a loan last month. Chief executive Adam Dodds said at the time that the move aimed to shore up the company’s balance sheet without having to revalue it: “It’s choppy markets. To zero in on a valuation at this point is maybe not that helpful.”

In addition to a lower valuation, which can be an embarrassing signal to markets and hurt morale internally, down rounds may carry stricter terms such as strengthened liquidation protocols and anti-dilution protection, said S&P Global Market Intelligence analyst Tom Mason.

Selling out entirely was becoming an increasingly attractive option for many companies, said Keidan at Torch Capital. Apple’s privacy changes have significantly increased customer acquisition costs, making existing customer bases more valuable at the same time fintech valuations are coming down. Boards began exploring potential sales in the spring, he said.

Fintech acquisitions — already on track to pass 2021’s record — will probably accelerate through the rest of the year as traditional financial companies such as JPMorgan Chase and Mastercard take advantage of relatively cheap software groups.

“I’m seeing it brewing very fast right now,” said Michael Abbott, global banking lead at Accenture, adding that tie-ups between fintech challengers and incumbents are on the rise.

Deals so far this year include UBS’s acquisition of Wealthfront and Fiserv’s purchase of Finxact.

“What consumers want is the best of what the neobanks have to offer in terms of experience and an ability to get products quickly, but at the same time what they’re going to need in a rising rate environment is the balance sheet of a bank,” said Abbott.

One investor at a large private equity firm said they had received a steady drumbeat of pitches from fintechs looking to sell themselves in recent weeks but had passed on all of them.

“Who’s to say this price is really the right price? What if six months from now that price is actually considered too expensive?”

 

Copyright The Financial Times Limited 2022

© 2022 The Financial Times Ltd. All rights reserved. Please do not copy and paste FT articles and redistribute by email or post to the web.

June 29th 2022, 12:18 am

A guide to good governance for startups

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Dr. Mussaad M. Al-Razouki is the chief investment and business development officer of Kuwait Life Sciences Company. He has over 15 years of experience in venture capital and private equity investment with a focus on healthcare and technology.

The California Public Employees' Retirement System (CalPERS), is the largest public pension fund in the United States of America and one of the world’s most influential investors; with ~$470 billion of assets under management. 

CalPERS recently submitted a regulatory filing that would support a proposal by the National Legal and Policy Center that Berkshire Hathaway’s board chair should be independent. A role that is currently held by legendary investor Warren Buffet, who is also Berkshire’s Chief Executive Officer (CEO). If passed, the notion would disqualify Mr. Buffett from running for the Chairmanship at the upcoming Berkshire General Assembly. More on that later.

The National Legal and Policy Center has also filed measures arguing that the chair should be an independent member of the board at a variety of companies (many also partly owned by CalPERS and Berkshire) including Goldman Sachs, Coca-Cola, Mondelez International, Salesforce.com and Home Depot.

According to consulting firm Spencer Stuart, companies are increasingly deciding not to have their chief executives serve as chair. As of 2021, 59 per cent of companies in the S&P 500 had split the chair and chief executive roles, compared with 55 per cent in 2020 and 41 per cent back in 2010.

My personal preference is for the Chair of the Board to be separate from the CEO, while the CEO does have the option to be part of the Board as a voting member. One should not be both the captain of the team and the main referee. This is obviously mostly applicable to large, publicly traded companies where the ultimate responsibility of the board is to protect the interests of the shareholders. This is known as the board’s fiduciary duty (fiduciary is just a fancy way of saying trust).

At the startup stage of a business, titles mean much less and founders are essentially the Vice President of Everything. However, as the business grows, it is important to take into account the various options you have to maintain what’s known as good governance. Early on, the temptation for many an entrepreneur is to find the most powerful/wealthiest person in their (extended) network and name-drop them into a board position or beg them to be a Potemkin chair wielding a rubber stamp. This is actually a bit counterproductive to what startups need more at their earliest stages; sweat not splosh, more hands than hand-outs. 

It is paramount that your first board members dedicate time, ideally on a daily basis or at the very least, weekly compared to the more mature cadence of quarterly enjoyed by boards of established companies. Opening doors is appreciated, but the best board members hold your hand while walking through those doors and help you figure out how to kick down a few more. I also recommend keeping your first boards down to a maximum of five members, ideally not including the co-founders. There should also be at least one independent board member, meaning, a board member who has no financial interest in the company. Technical startups, especially those in the medtech or fintech sector, should also have a more technical advisory board e.g. a Clinical Advisory Board or Shariah Compliance Board respectively as examples. See, you already have more soft power sinecures at your disposal. Fast decision making is the key rate limiting step for early stage startups, so weave a tight net. It is also possible to have an even number of board members, with the Chair usually having a “casting vote” to break the deadlock or to simply have a mechanism that an outright majority of all members voting yes is required for any important strategic decision.

As your company and board grow, you might then want to create committees. There are a few committees that are absolutely essential to ensuring good governance in the long term. Three key committees come to mind:

The Audit Committee - the primary role of which is choosing a financial auditor (ideally ever year or at least every three years) and reviewing the audited financial statements

The Risk Management Committee - the primary role of which is to both list and troubleshoot various risks that may affect the core business of the company.

The Compensation Committee - the primary role of which is to monitor and approve the management’s suggestions in terms of pay, including employee stock option plans and the like. Imagine if you could just increase your own salary and compensation without any oversight. Of course you deserve that bonus. Of course you do. 

Boards can really burp out as many committees to handle any number of essential follow up items as they collectively like. The key is to use these committees to equally divide power and keep pressure on management e.g. as a Strategy or Implementation Committee to keep overall track of management KPIs or the uber-meta Governance Committee to make sure that the board is ‘governing its governance well’. A weirdly efficient one that tends to be touted in the Arab world is the Executive Committee to the Board (abbreviated to “ExCom”), where a smaller subset of the board (e.g. three members out of 10) will meet on a more regular basis to push through key decisions in between the more formal and ceremonial board meetings.

For the investors reading this article, I will mention a few other vehicles that can allow you to be a bit more passive in your involvement with your investment. These include the Board Observership where you have the ‘luxury’ of sitting in on board meetings, but lack the firepower of an actual vote. Influence can be exerted either in spoken or unspoken terms during these meetings. Rolling eyes and sighs can sometimes shake up a CXO more than a unanimous vote. Another, again somewhat passive position is to be a member of the LPAC or Limited Partners Advisory Committee. This is usually reserved for investors who are limited partners in a venture capital fund. Smart general partners will tend to seed LPACs with supporters in case of loggerheads with their own board or investment committee.

Back to Buffet. It is unlikely that the CalPERS motion will find any real support. Even though the pensioners of California own nearly $2.3 billion worth of Berkshire shares, that translate to barely 0.3 per cent of its market value. Mr. Buffett alone has over ~100X that (a 32 per cent voting interest) in Berkshire and in last year's balloting for Chair, Buffett received 97.8 per cent of the vote. Perhaps as a hedge, Calpers still supports re-electing Mr. Buffett to the Berkshire board.

 

June 27th 2022, 3:33 pm

SVC Invests in the first venture debt fund

Wamda

Press release:

Saudi Venture Capital (SVC) announced its investment in a global specialty lending fund managed by Partners for Growth (PFG), one of the international and experienced fund managers providing venture and growth stage debt instruments to startups and SMEs. PFG also maintains a close strategic partnership with Silicon Valley Bank.

The fund focuses on offering venture debt instruments to high-growth startups and SMEs in several sectors, such as technology, fintech, healthcare, and life science. 

Commenting on the investment, Dr. Nabeel Koshak, CEO and Board Member at SVC, said: “The investment in the venture debt fund by PFG is part of SVC’s Investment in Funds Program, and is to implement SVC’s latest strategy related to the launch of the “Investment in Venture Debt Funds” product in order to fill the financing gaps in the venture capital ecosystem. Venture debt funds provide financing solutions to high-growth startups and SMEs to prevent equity dilution for founders and existing investors and allow startups and SMEs to achieve greater progress during their growth journey.”

“Partners for Growth is pleased to have the support of Saudi Venture Capital,” noted Andrew Kahn, CEO and Managing Director at PFG, “partnering with SVC will help further catalyse activity in the private debt and specialty lending market for regional high-growth companies to complement the local venture capital market.” 

Saudi Venture Capital (SVC) is a Government VC established in 2018 by Monshaat as part of the Financial Sector Development Program (FSDP). SVC contributed to the development of the VC ecosystem through the investment in 30 VC and PE funds and the co-investment with 5 angel groups and fund managers for the primary goal of stimulating and sustaining financing for startups and SMEs from pre-seed to pre-IPO by investing $1 billion. 

 

June 27th 2022, 3:33 pm

Careem acquires food delivery startup MUNCH:ON

Wamda

Press release 

Careem, the region’s leading multi-service platform, announces the acquisition of MUNCH:ON in the UAE. 

Founded in 2016 by Mohammad Al Zaben, Dana Baki, and Awn Ali, MUNCH:ON is a subscription-based food delivery platform which connects customers to meals at a discount by tapping into under-utilised kitchen capacity and using scheduling, bundling and routing software. The solution drives massive efficiencies for restaurants and cloud kitchens and has built scale in the corporate lunch segment. 

MUNCH:ON will stop daily operations and the offering will be rebuilt on the Careem app. The Careem Food and MUNCH:ON teams will work together to deliver even greater value by introducing low-cost meal segments that MUNCH:ON has pioneered in the region as well as new food discovery and delivery options for corporates. MUNCH:ON has delivered millions of meals to customers across 20 thousand companies. 

Mudassir Sheikha, CEO and Co-founder of Careem, commented: “The MUNCH:ON team have built a competitive food offering driven by a clear vision to make food more accessible and affordable. The Food offer on the Careem app today serves millions of customers across the Middle East and is growing rapidly. By acquiring MUNCH:ON, Careem Food will be able to build an even more competitive offering with a much richer variety of benefits for both customers and restaurant partners.” 

Mohammad Al Zaben, CEO and Co-founder of MUNCH:ON, commented: “At MUNCH:ON, we set out to build the most affordable food ordering experience in the world. We are thrilled to be a part of a broader mission at Careem to deliver undeniable value to customers, partners, and Captains.” 

In the UAE, the Careem Super App offers more than a dozen services including ride-hailing, food and grocery delivery, micro-mobility, payments, and partner services including car rental, home cleaning and PCR testing. Careem Food serves millions of customers with access to over 18,000 restaurants in 8 core cities across the UAE, Saudi Arabia, Jordan and Qatar. 

June 24th 2022, 12:02 pm

MNT-Halan acquires Talabeyah for undisclosed amount

Wamda

Press release:

MNT-Halan, Egypt’s leading fintech player, announced today the acquisition of Talabeyah, a B2B e-commerce platform that offers FMCG supplies directly to small merchants, retailers, and soon, consumers, meeting all their requirements with next-day delivery. As a result of this transaction, MNT-Halan will be disrupting the current multi-layered and fragmented FMCG supply chain model and empowering small merchants.

MNT-Halan’s digital ecosystem includes small business and consumer lending, payments, and e-commerce. Adding a digital FMCG offering to MNT-Halan’s merchant network greatly enhances the company’s breadth and scope and increases stickiness to its ecosystem.

The terms of the transaction were not disclosed.

Talabeyah was founded in 2020 by Karim Nassef, Amr Abbas, and Khaled Hussein to disrupt and digitize the informal FMCG market in Egypt by leveraging technology, an innovative supply chain model, and the founders’ extensive experience in the FMCG sector. Talabeyah’s digital platform provides small retailers immediate access to an extensive range of products, clear visibility on pricing, and highly reliable quality of service to help them optimally manage their businesses.

Commenting on the acquisition, MNT-Halan CEO, Mounir Nakhla, said, “The acquisition of Talabeyah is another step in our strategy of building a comprehensive digital ecosystem and is a perfect fit for our two companies. Talabeyah has developed an elaborate online catalogue, signed contracts with the largest FMCG suppliers, and demonstrated solid execution of its operations. MNT-Halan will enable Talabeyah to scale nationwide by providing access to hundreds of thousands of merchants and retailers, financing their customers’ purchases and backing the firm with our 120 tech engineers. I am excited to partner with Karim and his talented team to continue to extend our product offering to Egyptian retailers and further grow our loan book and margins.”

Karim Nassef, CEO of Talabeyah, added, “We are happy to have finally reached the closing and are very much looking forward to growing our business nationwide. Teaming with MNT-Halan provides us with extensive talent and technological and financial power to allow us to rapidly scale our operations. We are thrilled to be part of MNT-Halan’s vision and are excited to expand cross border with them.”

VanCampen Liem, Maatouk, Bassiouny & Hennawy, White & Case, and Van Doorne were legal advisors on the transaction.

June 23rd 2022, 4:17 pm

BIM Ventures launches $32 million BIM Investments II

Wamda

Press release:

The leading Venture Building Studio in the region, BIM Ventures, has officially announced the launch of its second venture building investment fund, “BIM Investments II” with a value of SAR120 million ($32 million) in its pursuit to effectively contribute to the region’s startup ecosystem through venture building.

BIM Investments II's strategy will primarily focus on building startups alongside founders, starting with idea validation and until market launch. It will also provide emerging local tech companies with the capital, expertise, and operational support they need to grow and prosper in the market. Moreover, BIM Investments II has an allocation for direct investments in follow-on rounds, which will enable and support startups in their spin-off from the studio.

The venture studio’s first fund, “BIM Investments I”, was launched in January 2020 as the first pure-play fund for a venture building studio in Saudi Arabia, and it had co-built and invested in 20 tech startups. BIM targets pre-inception ideas, pre-seed, and seed-stage tech startups.

Majid AlOsaimi, Chairman of the Board of Directors, stated that: “This step comes to actively contribute to the investment and innovation ecosystem in the Kingdom and the region, in line with the initiatives and support that the entrepreneurship system receives under the Kingdom's Vision 2030. We significantly value the trust and support of our investors and business partners, and we are thankful to the distinguished BIM team that works around the clock to build innovative startups.”

Mohamed Amine Merah, BIM’s Founder and managing partner, emphasized that “This investment vehicle is a continuation of its predecessor and is aligned with the venture-building fundamental principle in the acting as institutional co-founders.” He also added “BIM philosophy is to make sure founders build business models that prioritize financial sustainability. We believe in startups that balance strong growth and healthy cash flows by being capital efficient and focusing on unit economics that make sense early in the building journey.”

BIM investments II will focus on property technologies (Proptech), investment technologies (InvestTech), and financial technologies (FinTech) and will be open to platform verticals in other sectors. In addition, BIM will continue to concentrate on Saudi-born ideas and startups while exploring ideas in the MENA region by launching its satellite offices in Egypt and the UAE later this year.

Rayan AlSharif, the Investment Partner, stated that “We find the Saudi market today to be competitive and rapidly growing, creating qualitative challenges that allow emerging companies to have many opportunities. Accordingly, in the second fund, we aim to develop innovative business models in cooperation with our partners and use our capabilities to efficiently verify the idea's feasibility and then invest in and build it to accelerate its growth and sustainability. During the first fund, we studied several business models in the targeted sectors, and this resulted in quality companies, which achieved more than eightfold growth in value. In the second fund, we aim to invest and create qualitative business models that exceed our achievements in the first fund.”

Ahmed Mirghani, Partner in BIM Ventures, stated that: “The venture investment ecosystem in the region has been growing and maturing considerably month after month, but we still see entrepreneurship and venture investment’s challenges when it comes to early-stage ideas,” he also added. “As a venture builder, this is where we come in by lowering the risk profile for both founders and investors, by putting in motion our network, accumulated experiences, and a shared pool of resources all under one roof.”

Back in March 2022, His Excellency, the Minister of Commerce, Dr. Majid Bin Abdullah Alkassabi inaugurated BIM Ventures’ full-fledged venture building ecosystem with its in-house capabilities ranging from tech development, branding, digital marketing, business development, venture analysts, fundraising services, and co-working spaces in addition to a vast network of advisors, subject matter experts, angel investment networks, VC’s and family offices.

June 23rd 2022, 4:17 pm

Nama Ventures invests in US-based IT startup Brev.dev

Wamda

Press release:

Brev.dev, containers for development, announced that it has raised an undisclosed amount in pre-Seed funding round by ​Nama Ventures​.

Brev.dev gives developers consistent development environments for each of their projects, similar to Docker but for development. With one command, have a ready dev environment with everything installed for any project, indistinguishable from your local environment, while still getting to keep any favourite tools and existing workflows.

Brev.dev was founded by 3 YC alums, Alecsander Fong (CTO), Ali Ahmed (COO) and Nader Khalil (CEO), building on their previous experience at Azure infrastructure and Workday dev tools.

“In 2022, and the most frustrating part of development is still messing with dev environments. But while every engineer at every company is individually solving this problem, the work isn’t unique. If someone makes a dev environment, they should be able to share it with anyone else”

“One of the problems that I used to face when I used to code 100% of the time was that my code worked beautifully on my local machine, but when I’d push my work to a QA or Production environment, it never worked!” said Mohammed Alzubi, founder and managing partner at Nama Ventures, “ Brev allows development teams to transform local environments from “pets” to “cattle”, any developer should be able to have their stuff just work whether working on their dev, QA or Production environments “ 

Mohammed added, “what I love the most about the Brev story is how the founders, from their YC startup, and that’s how I actually met Nader, stumbled on a bigger problem from their own personal pains, decided to pivot from their startup to build Brev, that‘s the definition of gaining insight along the journey, to find out what you really want to build,” “ we can’t be more proud at Nama to be backing 3 founders with deep experience in this space solving what developers really need, and most importantly gaining a friend in Nader along this exciting journey.”

June 23rd 2022, 4:17 pm

Vamstar closes $9.5 million Series A round

Wamda

Press release:

Vamstar, the leading AI-enabled global sourcing and procurement platform for medical supplies and pharmaceuticals, today announced the close of its $9.5 million Series A funding round. Alpha Intelligence Capital (AIC) and Dutch Founders Fund (DFF) led the round, which also included existing investors btov Partners and Antler. With this announcement, the platform is uniquely placed on building resilience to future disruptions to UAE’s healthcare supply chain.

Vamstar will use this investment to accelerate market and product development plans, deploying Artificial Intelligence (AI) to enhance its consumables and generics exchange platform, improving data quality for faster e-commerce, and digitising procurement and sourcing processes for both buyers and suppliers across the industry. 

In line with the UAE Government’s direction to accelerate digital transformation in the healthcare sector, Vamstar’s AI-based platform fills a specific gap in the healthcare supply chain. Globally, the healthcare industry lacks an organized procurement system that integrates data, processes, people, and technology across the supply chain. Despite advances in other industries, hospital procurement processes have not integrated digitally with suppliers’ commercial processes, leading to supply chain inefficiencies. Not only is there a need to realize the benefits of digitizing sourcing and procurement processes to reduce transaction costs, but to improve the data foundation to drive value-based healthcare. 

Digitising Healthcare Commerce

Vamstar was founded in 2019 by industry veterans Praful Mehta, Richard Freeman, PhD, and Vishesh Duggar to tackle the problem at the root of sourcing and procurement transformation failures: data integrity and user engagement. Vamstar combines best-in-class functionality for streamlining healthcare sourcing and procurement processes by using Machine Learning, Deep Learning and Natural Language Processing to connect billions of data points across the supply chain network, provide real-time market intelligence, and enable digital commerce through a common e-procurement platform. Vamstar is in collaboration with the University of Sheffield and the University of Nottingham and has won Innovate UK funding for several high-profile projects including post-COVID recovery to help monitor supply chain risk, and supply-demand matching by creating the largest healthcare supply chain network.

“We see a tremendous opportunity in a market that is largely underserved for the Vamstar platform to organize the procurement system in the healthcare industry,” said Terry Chou, Partner at Alpha Intelligence Capital “The Company’s advanced Natural Language Processing capability sets them apart from other offerings. Paired with the strategic vision of the founders Praful, Richard, and Vishesh, Vamstar is setting the standard for procurement-enablement in healthcare.”

“Healthcare supply chains are under tremendous pressure with ongoing crises like COVID-19, the war in Ukraine, and rising inflation,” said Vamstar founder and CEO Praful Mehta. “There is very little data available to help healthcare procurement managers and suppliers make decisions in real-time. At Vamstar, our goal is to empower supply chain professionals, clinicians, hospital administrators and their suppliers to collaborate in innovative ways to create meaningful relationships. It is only by enabling a shared vision for collaboration, fueled by better data and insights, that we can deliver greater value for all stakeholders and the wider community within the healthcare ecosystem.” 

Vamstar connects both buyers and suppliers electronically to automate transaction and process flow across the supply chain on a global scale. The platform is used by businesses and organizations to connect suppliers, such as pharmaceuticals, consumables, medical devices, and digital technology companies, with public and private buyers, such as hospitals, laboratories, health insurances, clinics, corporations, and universities or Group Purchasing Organizations (GPOs).

Buyers can use Machine Learning to search across suppliers and their catalogues; launch tenders and sourcing events using automated workflows; receive bids and quotes in a prioritized sequence, and place orders electronically and automate the source-to-pay (S2P) processes. Suppliers on the other hand can get prioritized access to tenders, RFXs, and direct orders from 86,000 hospitals and clinics across 100+ countries directly or within their Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) platforms; get access to Machine Learning (ML) forecasts and Natural Language Processing (NLP) enriched catalogue and tender award data with virtual supplier profiles, and receive orders electronically and automate the order-to-cash (O2C) processes.

June 23rd 2022, 7:32 am

From nappies to cricket: China’s Alibaba targets South Asia

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Benjamin Parkin and Farhan Bokhari in Karachi and Ryan McMorrow in Beijing

In a vast warehouse on the arid outskirts of Pakistani megacity Karachi, hundreds of young workers sort through boxes of nappies, cooking oil and mobile phones.

The items are handpicked off the maze of shelves, carried by forklifts and ultimately packed into trucks to be dispatched to Karachi’s roughly 20 million residents and beyond.

Though Alibaba’s name and orange logo are not visible, this warehouse is a central part of the Chinese tech giant’s strategy to crack South Asia, one of the world’s fastest-growing e-commerce markets.

Daraz, an e-commerce company that Alibaba acquired in 2018, has proved a promising avenue into a tricky region for the Hangzhou-based company, which has effectively been shut out of India after the country curtailed Chinese investment over geopolitical tensions.

Through Daraz, Alibaba has expanded its reach as the Pakistan-based group spread to Bangladesh, Sri Lanka, Nepal and Myanmar, becoming the region’s largest e-commerce company outside India.

It comes as Alibaba steps up its global push. Its international business — including Daraz, south-east Asia’s Lazada, Trendyol in Turkey and AliExpress — is one of its more promising segments at a time when China’s tech crackdown, slowing economy and rising competition have left its domestic operations sputtering.

Chief executive Daniel Zhang told investors in December that the international business had “huge potential” with a “long runway ahead of us”. This year, new finance chief Toby Xu said it was one of two segments expected to become “increasingly important growth drivers in the future”.

Daraz was founded in Pakistan by Germany’s Rocket Internet in 2012 and expanded around South Asia before being acquired by Alibaba for $194 million in 2018. The company, which says it has about 40 million users, is primarily an e-commerce marketplace for small vendors but has expanded into lending and even streams cricket matches.

Bjarke Mikkelsen, Daraz’s chief executive, said the company was “just at the beginning”.

“By integrating [with Alibaba’s] ecosystem there’s a huge opportunity,” he added.

Daraz operates in one of the world’s most populous regions, with about 440 million people across its markets. Tech adoption is growing rapidly. For example, smartphone take-up in Pakistan and Bangladesh is set to grow faster than in other large Asian markets such as India or Indonesia.

“Pakistan was being looked at as a very unstable market,” said Jehan Ara, a Pakistan-based tech and software executive, but she added that it was now among the last sizeable untapped opportunities. “This is the largest market that’s left.”

Before he stepped down in 2019, billionaire chair Jack Ma envisioned making Alibaba “a platform for global small business”, acquiring Lazada, Trendyol and Daraz and expanding homegrown cross-border platform AliExpress.

The addition of the three local players deepened Alibaba’s position in three separate emerging markets, while AliExpress shipped cheap Chinese goods globally and spearheaded its European push.

But after Ma, a new generation of more inward-looking leaders took over and the international business — which contributed only about 7 per cent of total revenue — became less of a priority, according to one person close to Alibaba’s overseas operations.

Now, the internal pendulum is swinging back towards international expansion. In December, Jiang Fan, one of Alibaba’s most promising young managers, was handed control of a reorganised international division.

But the renewed global effort is likely to be rocky. Sales at Alibaba’s international division have been volatile and appear to be slowing after a boom during the Covid-19 pandemic. A 14 per cent growth in sales in the fourth quarter, compared with the previous year, dropped to a 4 per cent rise in the first three months of the year as the division was hit by Turkey’s inflation crisis and new taxes for packages shipped into the EU.

The growth of e-commerce and tech in countries such as Pakistan and Bangladesh has lagged behind other markets including India and south-east Asia. While venture capitalists invested a record $366 million in Pakistani startups last year, for example, they invested $38.5 billion into neighbouring India, according to data from Pakistan’s Data Darbar and Bain & Company.

“Where India was in 2012, we’re here in 2022 . . . So we’re catching up, the change is happening, but the size is still very low,” said Mohammad Sohail, chief executive of Topline Securities brokerage in Karachi.

Daraz is one of the most visible examples of Chinese tech investment in a region where Beijing has spent tens of billions of dollars on infrastructure projects through its Belt and Road Initiative, but private sector follow-up has been slower.

“Generally our countries are very pro-China and they’re all in some shape or form part of One Belt, One Road,” Mikkelsen said. “Having a Chinese shareholder . . . has been seen as quite positive, that we’re attracting that kind of investment.”

While Daraz utilises Alibaba infrastructure such as Alipay for payments or Cainiao for logistics, executives said the company has also benefited from a more hands-off approach.

At Lazada, the largest of its overseas businesses, Alibaba parachuted in Chinese executives in a largely unsuccessful attempt to stave off competition from Singapore’s Shopee. But at Daraz and Trendyol, it left existing leaders in place. Mikkelsen, a former Goldman Sachs banker from Denmark, joined Daraz in 2015, before Alibaba’s acquisition.

While its foray into South Asia has proved promising, the short-term outlook has become more uncertain. Daraz’s markets have been particularly hard hit by global economic shocks. Sri Lanka became the first Asian country in more than two decades to default on its foreign debt last month amid an economic crisis, while Pakistan and Nepal have imposed import restrictions to try to control rising prices and dwindling foreign reserves.

The surge in fuel and other commodity prices has also pushed up Daraz’s costs. Some of its competitors, such as Lahore-based e-commerce company Airlift, have turned to mass lay-offs.

While Mikkelsen acknowledged that budget discussions with Alibaba’s leadership were “tougher this year than they have been for a while”, he argued that Daraz was better placed to withstand the storm — thanks to its deep-pocketed parent.

“E-commerce is sexy. It’s high growth. The money is pouring in in good times [but] sometimes people forget a little about the efficiency and path to profitability,” Mikkelsen said. “Alibaba is a long-term investor. Right now it’s a good time to have a strategic long-term investor with lots of cash.”

Copyright The Financial Times Limited 2022

© 2022 The Financial Times Ltd. All rights reserved. Please do not copy and paste FT articles and redistribute by email or post to the web.

 

June 23rd 2022, 2:46 am

AI startup Synapse Analytics raises $2 million pre-Series A round

Wamda

Press release:

Egyptian AI tech startup, Synapse Analytics, has concluded its pre-series A funding round. Led by Egypt Ventures, with participation from Cloudera’s founder, Amr Awadallah, as well as Africa Platforms Founder, Simon Rowlands, along with existing investors. The total investments for the round amounted to more than $2- million.

“AI is transforming every industry globally at a rapid pace. We believe the Synapse team possesses the technology and the talent to lead this transformation in the Middle East, and tackle the most challenging aspect of AI adoption through their MLOps Platform” said Ahmed Gomaa, Egypt Ventures CEO.

As the use of artificial intelligence has become an integral part of most business operations, difficulties with the deployment and maintenance of the systems have grown into a pertinent obstacle for users. Synapse Analytics aims at building trust between AI and the businesses trying to adopt machine learning in their operations through its machine learning operations (MLOps) automation platform, Konan. 

Gartner statistics states that 87% of all Machine Learning projects end in demise, due to the complexity and different roles required to deploy and scale a machine learning project in any business. Synapse’s use-case-focused platform works to combat this problem head-on by streamlining and automating the deployment and management of machine learning models.

The company has built its platform from first-hand experience in building and scaling AI algorithms. Since its inception, Synapse Analytics has built and deployed more than 100 Algorithms, in more than 12 industries including; financial services, logistics and fast-moving consumer goods (FMCGs), serving multinational clients, as well as local businesses and startups. The company employs more than 50 engineers, with experience levels ranging from PhDs and MScs to industry experts.

"AI can create unprecedented differentiation to any business. Businesses are hiring vast data teams, but unfortunately, most projects stay in experiment mode, off-production mode or if they ever go to production, they’re rarely trusted by the business due to the diffusion of responsibility that usually occurs in the process. adoption is everything when it comes to the success of AI" said CEO of Synapse Analytics, Ahmed Abaza.

The company was co-founded by Ahmed Abaza and Galal ElBeshbishy in 2018. Abaza carries over 10 years of experience in enterprise IT, industrial automation and marketing technology while ElBeshbishy worked in advanced bio-inspired technologies research while in the US. The two entrepreneurs brought their years of expertise in the tech industry together to create a product that is envisioned to accelerate and simplify the world’s embracement of AI.

Today, Synapse Analytics is helping businesses to adopt AI through its diverse product suite. Alongside offering their services, Synapse Analytics offers its flagship platform, Konan, as a software as a service (SaaS), which data science teams can use to ensure smooth deployment and scaling of their AI models. Konan is the culmination of more than four years of building, deploying and scaling AI with major local and multinational companies.

The platform gives data teams full autonomy on their pipeline without relying on extensive support software teams, to help in the deployment and scaling of the necessary infrastructure and enables them to better manage their machine learning projects and ensure the success of their adoption.

“The data scientist is central to our design. Our platform allows data scientists to focus on what they do best: build state-of-the-art ML algorithms. Once the model is built, Konan takes care of the rest of the lifecycle. Our mission is to accelerate the world’s adoption of Artificial Intelligence.” said the COO of Synapse Analytics, Galal El-Beshbishy.

June 22nd 2022, 9:32 am

Why I launched the 2022 Female Angels Movement

Wamda

It was late 2021, and I had just come off a panel at GITEX where we had discussed, at length, the struggles women face when fundraising. The discussion had become heated, and I had dismounted the stage feeling frustrated, even a little cheated. Once again, instead of talking about what we were building, we had ended up debating what it means to be a woman in business - the struggles, the challenges, could we perhaps explore crowdfunding as an alternative source of capital? 

Snore.

But let me take a step back.

***

2021 was a particularly difficult year to stomach as a female founder. Plastered all over mainstream media were enthusiastic reports about the total amount of venture capital invested in Middle East and North Africa (Mena) startups. $3 billion! A record year! Could Mena be the next Silicon Valley? Was there any better place to be a fundraising startup?!

Why then, did it not feel like a record year? If anything, 2021 felt harder to fundraise in than in previous years. More conversations, with more people, for less money. Why? 

Turns out, the “record year” didn’t count if you were a female founder. In fact, as a proportion of the total dollars invested, investments in female-led startups fell by 50 per cent in 2021, to a measly 1.2 per cent of the total.

Once, I tried to explain the lived reality of this statistic to my three-year-old daughter, Eleanor, and five-year-old son, Oliver. They got it straight away.

(Me) “So Eleanor, imagine you and Oliver both want to open a chocolate shop. I’m going to help you set up your chocolate shops by giving you some M&Ms. I have 100 M&Ms, and I’m going to divide them between you and Oliver. I’m going to give Oliver 99 M&Ms, and I’m going to give you one.”

I hand out the M&Ms. Eleanor bursts into tears.

(Eleanor) “It’s not fair! Oliver has more than me!”

(Oliver, concerned) “Why, Mummy? Why do I have more than Eleanor?”

(Me) “Because Eleanor’s a girl, Oliver. Not as many girls open chocolate shops. How many chocolate shops can you think of that are run by girls in Dubai? One? Two? How do I know Eleanor’s going to do a good job? Eleanor’s younger than you. And she likes playing with babies. Eleanor, what happens if you get distracted in the middle of running your chocolate shop and want to play with your baby? Who will look after the chocolate shop then? Besides, I’m pretty sure Oliver knows more about chocolate than you.” 

(Eleanor) “Oliver doesn’t know more about chocolate! I like chocolate the same as Oliver!”

(Me) “It’s OK, Eleanor. I’m not going to give you more M&Ms. But I am going to spend a couple of hours teaching you about chocolate and how to run a chocolate shop. How does that sound?” (It broke my heart doing this, even though I’d explained upfront it was just to make a point).

(Eleanor, uncertain) “Then will you give me more M&Ms?”

(Me) “No, I won’t. But once you prove you can start a chocolate shop with one M&M, maybe someone else will give you more M&Ms. What do you think?”

Pandemonium ensued.

It took me a good 10 minutes to restore order. Oliver had already fetched two bowls and counted out 49 M&Ms into Eleanor’s bowl in an attempt to console her. Although I explained to Eleanor that in no way did I believe the proposed system of M&M distribution to be fair, and of course she was just as capable of running a chocolate shop as Oliver, she looked at me warily for the rest of the day, and still today asks if she can have the same number of M&Ms as Oliver every time I hand them out.

The axe forgets, but the tree remembers.

***

I came away from the panel at GITEX feeling a little like Bill Murray in Groundhog Day, doomed to repeat the same inevitable chain of events and interactions until the end of time. 

But the next day was better. I sat with a potential angel investor and had a good conversation with her about Nabta Health and our $1.5 million Seed round, which we were raising at the time (and have since closed). We discussed the shortage of female angel investors in Mena, and how difficult it is to pitch a product to a group who are significantly less likely to experience the critical, “Wow! That’s so cool!” moment that investors want in order to back a venture. Not because what we’re doing isn’t cool, but it’s hard to appreciate the benefits of holistic and hybrid healthcare for women if you are not a woman.

We fixed a date for a follow-up meeting. The Closing Meeting. And then, thirty minutes before we were due to meet, for perfectly legitimate reasons, she cancelled.

I sat on the sofa, deflated, and thought, “Now what?”

This woman wasn’t a local angel investor; she had flown in for a brief trip, and she was returning home the next day. I had trawled through the publicly available lists of Mena angel investors online; I knew who the female angels were, I had spoken to all of them.

“This can’t be it,” I thought. There must be more women who are willing to invest. The Mena region boasts some of the most empowered women in the world. Thirty per cent of capital in the GCC is held by women. There must be female angel investors out there somewhere. 

I put out a post on LinkedIn, mentioning the launch of a movement to identify and publicly list 2,022 female angel investors for emerging markets by the end of 2022. I was overwhelmed by the response. Over 36,000 people saw the post, almost 500 responded. That one post was featured by news outlets on four separate continents.

So the 2022 Female Angels movement was born, with the long-term aim of transforming the investment landscape for female-founded companies in Mena, and with the short-term aim of getting more women to invest, and to discover the joy of making their money work for them. Fast forward one month, and the movement had officially launched at the Capital Club around a newly formed SteerCo - a group of women and men committed to working together in a voluntary capacity to engage, educate and encourage women to become investment angels in early stage startups in Mena.

Today, the 2022 Female Angel movement has grown into a fully-fledged operation, with multiple committees, ambassadors and advocates, and a programme of speaking engagements to help get all women investing as angels.

To date, the 2022 Female Angels movement has added over 200 female angel investors (more than 10 per cent of its target) to a publicly available list on its website - fifty more than the latest list of female angel investors pulled together by Sifted for Europe.

My hope for the 2022 Female Angels movement is that it makes the early stage fundraising process a little bit easier for a lot of founders in Mena. Founders with exciting ideas and huge potential, who just need the opportunity to sit in front of people who can look back at them and exclaim, with genuine feeling and mounting excitement, “Wow! That’s so cool!”

 

June 22nd 2022, 4:47 am

Huspy raises $37 million Series A led by Sequoia Capital India

Wamda

Press release:

Huspy, the EMEA proptech startup, has announced a $37 million Series A funding round led by Sequoia Capital India to build the future of home buying across the region. Founders Fund and Fifth Wall made their Middle East investment debut in this round. In addition, Chimera Capital joined returning investors Breyer Capital, VentureFriends, COTU, Venture Souq and BY Venture Partners. 

Launched in 2020, Huspy is on a mission to digitally transform and reimagine the homeownership journey. In less than two years, the company has reached $2bn in annualised GMV, growing at 25% MoM to become one of the largest housing platforms in the UAE. Huspy’s Series A round will be used to extensively invest in technology development, double down on growth in the UAE and Spain, and expand across Europe.  

Huspy also announced the launch of its full-service property marketplace complementing the company’s position as a leader in home finance. Real estate continues to be an in-demand asset class around the world, growing by 59% YoY in 2021. However, less than 1% of home-buying transactions are completed through digital channels. With this addition, Huspy will solve challenges across every stage of the home buying process.

Jad Antoun, co-founder & CEO of Huspy said, “We’ve laid the foundation for a very defensible business that’s redefining home ownership in EMEA. Our aspiration is to continue building Huspy into a category-defining company and set a new bar for the way people buy and finance their houses. In just under two years, Huspy has grown to become one of the largest property platforms, facilitating billions of dollars in volume. Today, we’re humbled to partner with global and regional investors and we look forward to working together to reshape the world’s largest asset class.”

With a total addressable market of $13 billion across the UAE and Spain, Huspy remains committed to creating a world-class experience for home buyers in EMEA. Through trusted partnerships with leading property agents and international financial institutions, Huspy’s customers have a unique opportunity to discover, buy and finance their homes all in one place. 

“We are impressed with Jad and Huspy's mission to transform the home buying and financing experience in the region. In a short span of time, the company has demonstrated its strong value proposition for the real estate ecosystem and has become the market leader in mortgage broking in the UAE with healthy unit economics. And, Huspy’s ethos to build for the long term with a deep focus on having the best team in the region resonates deeply with us.” GV Ravishankar, MD, Sequoia India

Huspy’s innovative platform features a suite of digital solutions to create unparalleled benefits for buyers, property agents and mortgage brokers. Today, Huspy is home to a world-class team of start-up talent from the likes of Loft, QuintoAndar, Uber, Loggi, SumUp, etc with 30+ nationalities located across Dubai and Madrid, who are building the future of the proptech ecosystem.  

Previously, Huspy raised one of the largest seed rounds ever in the MENA region and in 2022 acquired Home Matters, to form the biggest home financing company in the UAE.

June 21st 2022, 2:34 pm

Aldar invests in Taronga Ventures

Wamda

Press release:

Aldar Properties (‘Aldar’) has increased its exposure to global real estate technology funds through a partnership with Taronga Ventures, a leading real estate technology investor operating across the Asia Pacific (APAC) region. The investment forms part of Aldar’s broader innovation strategy, promoting the adoption of disruptive technologies within the real estate sector.

Taronga Ventures (‘Taronga’) has created a global ecosystem to advance and scale innovation-driven companies by using its fund to invest in these companies and provide strategic access to its network of world-leading real estate co-investors.

Through the partnership with Taronga Ventures, Aldar will gain access to technology co-investment opportunities providing additional revenue streams and new efficiencies for Aldar’s portfolio. Simultaneously, the opportunities will allow Aldar to forge strategic partnerships that deepen technology knowledge transfer and ideation in the Middle East. 

This partnership represents Aldar’s fifth real estate technology fund investment and diversifies Aldar’s exposure to the sector, through Taronga Ventures’ global mandate and positioning in the APAC region. In line with Aldar’s efforts and commitment to supporting decarbonisation across the real estate sector, Taronga Ventures is also a certified carbon-neutral platform that prioritises collaboration with companies that align with the UN’s Sustainable Development Goals.

The investment is Aldar’s first in a real estate fund in the APAC region, where investment in PropTech is expected to reach $26 billion by 2024, according to UNISSA, a global platform for PropTech procurement.

Maan Al Awlaqi, Aldar’s Executive Director of Strategy and Transformation, said: “Aldar’s innovation journey continues to accelerate at a rapid pace. By tapping into technology and tech-enabled companies across the world, Aldar is not only able to further diversify its business, but crucially, it is able to facilitate the transfer of innovation to the Middle East’s real estate market. Taronga Ventures’ focus on the APAC region, as well as its ability to identify technology companies that have far-reaching positive ESG impacts, aligns with our vision to advance the UAE’s property sector through new technology and sustainability-focused solutions.”

Jonathan Hannam, Co-Founder and Managing Partner, Taronga Ventures, said: “Having worked and lived in Abu Dhabi we are delighted to be returning to this important region to support emerging technology companies, with such a strong and dynamic partner as Aldar. We can see immediate growth opportunities for many of the Fund’s investments within the existing Aldar portfolio and especially in new developments being undertaken by the group. We will also be working closely with Aldar to further develop the technology ecosystem in the Middle East.”

The investment in the Taronga Ventures fund adds to Aldar’s investments in four other real estate technology funds. These investments are from one tenet of the company’s framework to drive forward innovative practices, alongside its focus on corporate innovation and incubation programmes for startups in complementary sectors. These startup programmes include the Aldar Scale Up programme, which focuses on enabling the development of the PropTech sector in the United Arab Emirates, as well as the Manassah programme, which is Aldar’s entrepreneurship incubator that is aimed at nurturing retail technology start-ups and talent in the MENA region.

June 21st 2022, 2:34 pm

valU sells minority stake to Alhokair family

Wamda

Press release:

valU, MENA’s leading Buy-Now, Pay-Later (BNPL) lifestyle-enabling fintech platform, announced today that Fawaz Abdulaziz Alhokair, Salman Abdulaziz Alhokair, and Abdul Majeed Abdulaziz Alhokair (“Alhokair Family”) have entered into an agreement to acquire a 4.99% stake in valU through a capital injection of $12.4 million, signifying a valuation of $247.4 million for the company.

Currently subject to relevant regulatory approvals and satisfaction of certain conditions precedent, the transaction marks Alhokair Family’s first investment in a BNPL platform in Egypt, underscoring valU’s strength in the market and marking a key steppingstone for the platform to create strategic regional partnerships.

The transaction comes on the heels of valU’s entry into the Saudi market last week through FAS Finance, a joint venture (JV) with FAS Labs in which FAS Labs owns 65% while valU owns 35%. The launch of FAS Finance and the strategic partnership bring a lifestyle-enabling solution to Saudi shoppers, with valU offering greater affordability and value for customers, all available through one digital platform.

“We are thrilled to be further growing our partnership with the Alhokair Family. The transaction puts valU, the largest BNPL provider in Egypt, at a USD 247.4 million valuation, and is a testament to valU’s visible success story, business model, and potential for growth in Egypt and on a regional level,” said Karim Awad, Group CEO of EFG Hermes Holding. “We are proud to have grown a strong brand like valU that, since late 2017, has not only established itself as the leading BNPL platform but has also attracted the interest of the world’s largest retailer, Amazon, one of the most important brands globally, and now one of the region’s most prominent retail players, Alhokair,” concluded Awad.

valU is a fast-growing, innovative fintech platform in the MENA region that serves more than 574,000 app clients in Egypt, the Arab world’s largest consumer market. In its home country, valU currently boasts over 5,000 points of sale locations catering to hundreds of thousands of customers transacting in home furnishings, electronics, home appliances, fashion, auto spare parts, healthcare, education, and travel, among a wide array of other services. With its entry into the Saudi market, valU will be present across Alhokair’s expansive retail network of more than 1,000 stores as well as online on the VogaCloset and monobrand websites, including 14 in Saudi Arabia. It will also extend to other vendors, retail networks, and merchants to include and cover the entire Saudi market.

Alhokair Family’s agreement to acquire a stake in valU signals investors’ interest in the NBFI space in Egypt and puts it on the map as a leading innovator and exporter of financial inclusion solutions, at a time when inflationary pressures are on the rise in the country and the rest of the region.

“We are extremely proud of the fact that Alhokair Family is now a shareholder in valU. Preceded by the announcement of valU’s entry into KSA last week—our first new-market entry since we began operations out of Cairo 5 years ago —the acquisition agreement cements our solid partnership with Alhokair, a retail powerhouse and a perfect partner on our journey to expand across the region,” said Walid Hassouna, CEO of valU. “valU has definitely filled a financing gap in the Egyptian market and supported financial inclusion. The business model that we created strives to have a positive daily impact on hundreds of thousands of consumers, retailers, and service providers across the country,” concluded Hassouna.

Last month, EFG Hermes Holding and Amazon entered into an option agreement whereby Amazon agreed to acquire USD 10 million in EFG Hermes GDRs with the option to replace that investment into valU at a future date, translating into a stake of 4.255% of the issued share capital of valU.

June 21st 2022, 2:34 pm

Disruptech secures funding from AXIAN group

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Press release 

Disruptech Egypt Fund I ("Disruptech"), is a venture-capital fund dedicated to developing Egypt’s financial technologies ("Fintech") ecosystem by supporting start-ups and is nurturing a growing number of companies in adjacent sectors that are accelerating financial inclusion. The fund supports these start-ups from the seed-round investments through scaling and eventual growth. The fund manager's commitment to helping grow Egypt ́s fledgling fintech industry aligns with its broader mandate to expand access to financial services across the country, bolstering financial inclusion and supporting economic growth in Egypt.

Disruptech and the AXIAN group share the belief that fintech can bring efficient solutions to market that address social issues. AXIAN ́s commitment to Disruptech underscores its strategy, which posits that advances in innovation and disruptive technologies can improve people ́s day- to-day lives. This investment is fully-aligned with AXIAN group's mandate to grow within the digital economy by promoting innovation-as-a-service to the communities it serves and by making new innovative solutions more accessible to the public. With AXIAN already present in several countries across Africa, the partnership with Disruptech will create a platform to identify synergies between its brands and start-ups in the Egyptian fintech and digital economy.

We are thrilled with our partnership with Axian. Egypt is full of bright, talented founders but too often, they cannot secure the capital they need to expand their businesses. This fund is designed to change that and support drive the development of Egypt's fintech/fintech- enabled sector. Mohamed Okasha, Managing Partner from Disruptech.

The Egyptian economy is one of Africa ́s fastest-growing markets. It bears witness to the talent and resilience that are so central to our spirit as Africans. Through this investment, AXIAN is voicing its support for businesses to push the boundaries of technology, to reinvent themselves or adapt today ́s technology to what challenges the future may hold. This way, we can continue to build bridges for the sharing of skills and innovation that serve broader financial inclusion across Africa. Hassanein Hiridjee, CEO of the AXIAN group.

 

June 21st 2022, 2:34 pm

Saudi’s T2 signs investment agreements with Fawry, Khazna, Khwarizmi Ventures

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Source: Egypt Today

Agreements signed between Egypt and Saudi Arabia represent a qualitative transfer in investment relations between the two countries, according to CEO of the General Authority for Investment and Free Zones (GAFI), Mohamed Abdel Wahab.

Abdel Wahab elaborated that these agreements will support the infrastructure, logistics and technology sectors; which work to develop the capabilities of the Egyptian economy.

The Business Research and Development Company (T2) also signed an investment agreement with Fawry for Banking Technology and Electronic Payments to develop financial technology solutions to serve the movement of trade exchange and remittances between the two countries.

In the same field, Khwarizmi Ventures and Khazna signed an investment agreement with the aim of expanding in the Kingdom of Saudi Arabia and providing mobile financial services to the Kingdom's workforce.

With regard to food industries, Aquat Food Industries and Halawani Misr signed a memorandum of understanding in order to grant the Egyptian company the rights to manufacture Aquat/Al-Baik products in Egypt.

In the medical and pharmaceutical sector, Jamjoom Pharma announced the inauguration of the Jamjoom Pharma factory in Egypt.

The signing ceremony between the two sides also witnessed the signing of the Executive Program Agreement for Cooperation in the Media Field between the Saudi Minister of Information and the Chairman of the Supreme Council for Media Regulation; this is to enhance bilateral cooperation between the two sides in the fields of press, radio, television, drama production and digital media.

Continue reading this story

June 21st 2022, 2:34 pm

Kleen bags $2 million to digitise local laundry market

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Press release 

KSA-based technology solutions company Kleen has closed a $2M (SAR 7.5M) SEED round with participation from Plus Venture Capital (+VC), Riyadh Angel Investors (RAI), and several angel investors. 

Kleen was established last year and launched its services in November. It is developing an integrated system of technical, operational, and logistic solutions to enable the service providers to raise and improve quality, control operations, and reduce services costs in addition to improving clients’ experience. 

To guarantee the quality of the services provided to clients, the company makes contracts with the service providers within the framework of trade and technical agency (Tech Franchise) which is a business model applied for the first time to the laundry sector in the Kingdom, according to the company.

Hassan Haider, the managing partner at +VC, said that using modern technologies, within the innovative working models in service sectors, is one of the main possibilities to attain targeted growth rates and expand at start-up companies. Therefore, we participated in the investment round in Kleen in addition to the integrated work team on which we can rely in the attainment of desired objectives.

Turki Al Sharman, co-founder of Kleen, added that the company shall use the investment to extend geographically, provide its services in Riyadh, Jeddah and other areas in the Kingdom, keep attracting talented staff and build a work team who shall enable the company to provide more innovative technology solutions whether to clients of Kleen Application or to service providers.

 

June 21st 2022, 2:34 pm

WEMA Health launches after raising $3.5 million Seed round

Wamda

Press release: 

WEMA Health, a new digital health startup, launches in the UAE with the announcement of a seed investment of USD 3.5M, incubated under Europe’s largest digital health company, Dawn Health. Founded in March 2022, WEMA Health tackles the rising obesity pandemic in the region, where it’s reported that two in three people are overweight. 

Co-developed with the world’s leading obesity scientists Prof. Filip K. Knop and Dr. Rita Nawar, the science-backed medical weight loss program offers a virtual-first, medicated, end-to-end obesity program that helps its members lose up to 20 per cent of their body weight by deploying in-house top specialists. WEMA Health connects its users with endocrine specialists on the state-of-the-art app, with a focus on diet, exercise and psycho-social support. WEMA Health also makes available to members the modern and clinically documented weight loss medicine, GLP-1, which is prescribed in tandem with professional and personalised cognitive behavioural coaching, so members are empowered to make lasting lifestyle changes. 

Co-Founder and Head of MENA for WEMA Health, Leyla Azizova explained: “Obesity affects approximately 20 million people in the GCC alone, impacting not only their health but also their overall quality of life. In the Middle East, it’s estimated to cost the healthcare system $30 billion every year. With the innovation that WEMA Health brings, we will be able to help people with obesity to a healthier and happier life”. 

Principal Advisor of WEMA Health, Anders Dyhr Toft continued: “Combining medicines, coaching and best-in-class digital solutions, can be very powerful in healthcare. Modern weight loss medication is highly suitable for a virtual prescription and lifestyle intervention, and at WEMA Health, we will strive to help our members achieve an unprecedented, sustained weight loss of up to 20 per cent. WEMA Health’s global launch will be initiated in Denmark and UAE, and then several European countries will follow”.

Dr Rita Nawar, WEMA Health Medical Director and leading UAE endocrinologist explained that, unlike popular belief, weight loss is not a matter of willpower, but a metabolic issue. “Metabolic health involves not only the food we eat but also our energy and stress levels, emotional health and sleeping pattern. All these aspects play an important role and need to be taken care of when a person wants to lose weight.” 

Based on this belief, WEMA Health’s programme focuses on all aspects of metabolic health and aims to achieve a ‘metabolic reset’, enabling users to live healthier lives. Prof. Filip K. Knop, MD PhD, a worldwide leading expert on obesity and Academic Supervisor of WEMA Health, adds: “Our scientific understanding shows that obesity in the vast majority of cases is a chronic condition that requires medical treatment. Combining this treatment with fundamental lifestyle changes is what creates wholesome, sustainable, and meaningful solutions for patients”. 

June 20th 2022, 1:31 pm

Torod raises $1.33 million Seed round led by IMPACT46

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Press release:

The Saudi-based “e-commerce shipping easier” platform, Torod announced the closing of its Seed round at SAR 5 million ($1.33 million), led by IMPACT46 with the participation of local investors including Hala Venture & Seedra Venture. 

Founded in early 2022 by Faisal Almaklas and Ammar Almaatouq, bringing together deep expertise in e-commerce & logistics spaces, enabling fast and cost-effective shipping for D2C retailers with the ability to manage & track the orders through a single interface by Torod.

Torod lies in serving the pain points in the transportation and logistics cycle as the result of the extensive growth of the e-commerce space. By providing an encompassing post-order management experience, Torod is easing the burden of merchants' supply chain. The platform technology, helps merchants seamlessly choose the best method suited for the shipment from a wide range of courier partners local and international including SPL, J&T, SMSA & DHL, with real-time order tracking and returns management. 

“Post the covid pandemic the number of online buyers jumped and many businesses moved to online selling and that comes with a higher expectation from the shoppers for good delivery service. To meet these expectations, e-commerce has to enhance the delivery checkout experience and make sure it’s backed by the best-fit delivery partner reflecting the same values merchants are aspiring to. Here Torod comes to help the merchants control and monitor the whole process by catering to customers' variant needs” Added Faisal Al Mukhles, CEO & Co-founder of Torod.

Soon after the platform launch at the beginning of 2022, Torod was awarded the best shipment tracking solution in the Kingdom and received the MIT university award as one of the 3 best innovative solutions in the region. 

Mohammed Alnasyan from IMPACT46 commented on the investment “With the fast growth that the e-commerce industry is witnessing in our region, there come new challenges and problems that require new solutions to serve and keep up with changing consumer behaviour. Torod enables this industry by providing new innovative solutions for merchants and logistics companies to ultimately enhance the customer experience. Torod team, led by Faisal Almukhles and Ammar Almaatouq, comes with a unique and complementary experience in e-commerce and logistics that we believe is important to realize Torod’s vision.”

Hussain Almarhoon from Hala Venture commented “The e-commerce sector is one of the highest growing sectors locally and globally, and that is why we, in Hala Ventures, were keen to invest in the sector by enabling merchants through Torod platform, which seeks to make the shipping process easier and faster. We believe that Torod will be an added value to e-commerce platforms, as they provide ease of connection with various shipping companies with transparent contracts that suit the needs of merchants.”

With the freshly infused capital, Torod is looking to deploy it to accelerate its mission of enabling a fast and cost-effective shipping process for D2C retailers and enhancing the post-order experience for the merchants and the consumer on another hand. 

June 20th 2022, 9:47 am

The importance of last mile in e-commerce

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Lee Shepherd is the director at Amazon Logistics, Middle East and North Africa Operations

“Start with the customer and work backwards.” That’s the best advice I can give to any business leader setting out on their e-commerce journey. 

E-commerce is rapidly transforming the retail industry into an omnichannel ecosystem, but when it comes to customer experience, the fundamentals still apply. Customers want great service with a human touch. 

For the e-commerce customer, a direct connection generally only happens when the delivery driver arrives with the package. This final part of the order fulfilment operation is known as the ‘last mile’, where parcels are loaded onto vans in delivery stations and taken to the customer’s home or workplace. As this is the first time the customer physically interacts with the company, the last mile has a huge impact on customer buying decisions, brand trust and future loyalty.

Customers do not just want a smooth, hassle-free and friendly exchange at the doorstep. They also want speed and convenience. And they expect efficient support when questions arise.

When they do not get the service they expect, they are quick to walk away. A global survey by PwC found that one in three customers would break their loyalty to a brand they loved after just one bad experience.

In e-commerce, it is easy to be drawn into focusing too much on the first click that leads to a sale. But get the last mile wrong and that first click may be the last. 

And here we arrive at the key question: what does it take to build and deliver a best-in-class last-mile operation? 

Transformed by technology

E-commerce has transformed not just retail. It has led to the development of the most technologically advanced and far-reaching delivery networks the world has ever seen. 

This is why technology has to be the heartbeat of any business looking to establish a best-in-class last-mile network. The most successful systems are driven by AI and algorithms that allocate packages to delivery partners and then optimise their routes to speed those parcels to customers.

A new Amazon delivery centre in Abu Dhabi will deploy this kind of tech to enable more customers to benefit from services such as next-day and even same-day delivery. 

Delivering what customers want

This is a time of unprecedented opportunity for e-commerce businesses in the UAE. The market has grown dramatically since the pandemic accelerated the pivot to online shopping – and it shows no sign of slowing down. It is expected to record compound annual growth of 38 per cent in 2019-22, far ahead of the global average of 16.6 per cent.

Nine out of 10 shoppers in the UAE – and across the Middle East and North Africa – say they plan to buy everything online from now on, according to a post-pandemic survey by digital experience platform Sitecore. This calls for a swift and innovative upgrade of logistics and fulfilment operations. 

“Companies that fail to keep up with logistics trends risk losing competitive advantage and falling out of favour with consumers,” says the 2022 MENA E-commerce Report by CNNB Solutions. “Consumers expect transparency around order status and delivery, and some also want near-instant fulfilment. This experience is fast becoming a key differentiator, one that’s closely tied to perceptions of service and quality.”

Today, I have 12 years’ experience in the Fulfilment and Delivery sector. But if I were starting out now, there are a few things I believe it would be helpful to know.

Experience is everything

Retail, whether in digital or physical spaces, will always be about customer experience. This is why there will likely always be a place for browsing the shops in the glittering malls across the country, even as e-commerce accounts for a large section of the market. 

It is also why the businesses that win the battle for e-commerce customers will be those that can replicate that in-store human touch, while adding speed, convenience, efficiency and a friendly smile at the doorstep. 

Get the last mile right, and you will be the first choice for consumers who value customer experience above all else. 

 

June 20th 2022, 9:47 am

EFG Hermes' Tanmeyah acquires B2B marketplace Fatura

Wamda

Press release 

Tanmeyah for Microfinance Services, a wholly-owned subsidiary of EFG Hermes Holding and Egypt’s leading provider of microfinance solutions, announced today that it has successfully concluded the acquisition of Fatura Netherlands B.V. (“Fatura”). Fatura is a fast-growing tech-driven Business-to-Business (B2B) platform with a regional footprint of 22 governorates in Egypt. Fatura is backed by prominent shareholders in the field with EFG EV Fintech being one of the primary investors since 2020.

The platform brings together retailers, manufacturers, and wholesalers in one place. Fatura offers its users a multitude of innovative services, ranging from a marketplace with live product viewing and price transparency to B2B buy now pay later services and marketing support services.

Commenting on the deal, Minister of International Cooperation, H.E. Dr. Rania A. Al-Mashat, said, “Tanmeyah’s acquisition of Fatura, backed by Egypt Ventures, and its accelerator “EFG EV Fintech”, which is a partnership with EFG Hermes Holding, comes in line with the Government of Egypt’s efforts to increase the involvement of, and to empower, the private sector, as a major driver of comprehensive and sustainable economic growth.” Al-Mashat added that Egypt Ventures, the first venture capital company in Egypt with a government contribution, has succeeded in maximizing the return on investment in many pioneering emerging companies in their fields. 

This exit is a confirmation that the investment in Fatura has paid off and enabled the company to move forward in developing the volume of its business. 

Moreover, Egypt Ventures, and its two business accelerators, have invested in more than 175 companies since 2017, and the coming period will witness more success stories in supporting start-ups and exits that enhance the participation of the private sector in economic development. 

Commenting on the acquisition, Karim Awad, Group CEO of EFG Hermes Holding said, “This acquisition marks a major milestone for Tanmeyah, which has grown to become a key player under our Non-Bank Financial Institutions (NBFI) platform. 

Tanmeyah turned to this strategic acquisition to bolster its digital transformation and enrich its product and service offerings to become more holistic and support Egypt’s microfinance space. I am proud that all our NBFI brands continue to fuel the drive for digital transformation in Egypt as we continue building synergies by means of effective cross-selling, which helps diversify the offerings across our product and service portfolio, further supporting financial inclusion. We’ve always seen potential in Fatura, and we are firm believers in its ability to innovate in the B2B digital space, which is why our very own EFG EV Fintech made the decision to become one of the early investors in the company years ago.” The consolidation of Tanmeyah and Fatura as complementary businesses presents an opportunity for both to offer competitive and innovative solutions to the market. 

The deal fits within Tanmeyah’s digital transformation strategy to drive business growth by leveraging Fatura’s platform to introduce new and disruptive financial products. It also allows Tanmeyah to access Fatura’s fast-growing network of merchants and fill a large gap in the B2B credit market. 

Tanmeyah’s extensive geographical presence and broad client base will help Fatura expand its network of merchants and venture into new sectors of the B2B market, while its solid financial position and access to funding will help bolster Fatura’s growth. Hossam AlNaggar, CEO of Tanmeyah, also commented on the acquisition saying “We are extremely proud of this transaction. Fatura is a key addition to Tanmeyah’s portfolio, as it offers the company a faster route to digitally transform and develop. 

Our new consolidated product and service offerings confirm our focus on supporting the Egyptian economy from the ground up as they will aid microenterprises in ordering inventory from wholesalers through a one-of-a-kind digital marketplace. We see a huge financing gap in the B2B segment and, by joining forces, we will be able to power digital lending and cover more sectors in Egypt. Microfinance continues to play a key role in helping low-income households to access opportunities, stabilize their income flows, and cope with inflationary pressure.”

 By the end of 1Q22, Tanmeyah’s total number of clients had grown to reach a record high of 391,000 and its portfolio reached c. EGP 3.9 billion — its highest level since inception. Hossam Ali, CEO of Fatura, also commented saying “I feel incredibly proud of what we have achieved at Fatura and I am super excited about the upcoming chapter in our story. In just 2 years, and backed by a solid team of 500 believers, we have built a solid startup that has grown exponentially across the whole nation and impacted over 60,000 merchants. 

We are honoured to be setting the benchmark in the Egyptian startup ecosystem for M&A between digital disruptors and industry leaders, and firmly believe that this milestone will ignite a wave of more successful examples. Together with Tanmeyah, we aim to fundamentally change how B2B works in Egypt, radically facilitating the way trade, financing and payments are done. Through this acquisition, Fatura will strongly benefit from Tanmeyah’s broad client base and solid financial position to unlock more opportunities.” 

Throughout its years of operation, Fatura has witnessed a significant increase in its Gross Merchandise Value (GMV) and the number of active users, particularly after the two successful rounds of fundraising from six different venture capital funds and other prominent angel investors. 

Following the acquisition, Tanmeyah will own 100% of Fatura Netherlands B.V and the founders of Fatura will continue to manage the business as part of the Tanmeyah management team while becoming shareholders in Tanmeyah. The shareholders of Fatura will receive a combination of internally generated cash and existing Tanmeyah treasury shares.

 

June 17th 2022, 10:30 am

Digital staffing platform Jodop raises $1 million Seed round

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Press release 

Morocco-based on demand temporary staffing platform Jobop has raised $1M in a SEED  round led by Azur Innovation Fund, with participation from Plug and Play, and business angels. The round was closed in April this year. Jobop was launched early 2021 and it matches companies with blue collar temporary workers through its proprietary algorithm, in sectors such as hospitality, construction, logistics, and manufacturing.

The company says that it has seen a  growth of over 80% on a quarterly basis. It said in a statement, “We’ve seen a phenomenal market response since our launch in 2021. The economic uncertainty surrounding Covid has forced a lot of companies to turn to temporary workers. Jobop has been simplifying and accelerating their experience of finding qualified and vetted workers”.

 

The funds will be used to further improve its tech product and expand to new countries, with a launch in Egypt planned before the end of this year. Adnane Filali, General Partner at Azur Innovation Fund concluded, “We are thrilled to invest in Jobop and support them in their ambition of becoming the leading temp staffing company in Africa. Not only are they building a robust business but will also be having an important social impact by providing jobs to thousands of Africans”.

June 17th 2022, 6:01 am

Wa'ed leads $50 million Series B round for US-based fintech startup Wahed

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Press release 

Wa’ed, Saudi Aramco’s Entrepreneurship Centre, has announced leading a $50 million Series B funding round in New-York based fintech Wahed, which owns the ethical investment platform, Wahed Invest. 

Other investors in the round include international footballer Paul Pogba, who has also joined Wahed as their latest brand ambassador, and strategic family offices and institutions. HSBC Bank plc acted as financial adviser for the funding round. 

Wahed offers individuals the chance to invest and manage their money ethically in a quick and easy way. Wahed has gained support steadily since its inception in the US with over 300,000 clients globally across all Wahed entities.  

The Wa’ed investment in Wahed will support the startup’s current growth phase as it plans to launch an ethical neobank on its platform, allowing users to fulfill their banking and investing needs all on one super-app.

Wa’ed will also continue to act as the company’s “anchor partner” during its expansion into Saudi Arabia and the MENA region.  

“The rapid popularization of fintech solutions and their influence in advancing financial literacy and inclusion worldwide have created the right urgency for fintech products that are both ethical and easily accessible for individual investors,” said Fahad Alidi, Managing Director at Wa’ed. 

He adds: “Fintech leaders like Wahed acknowledge the role they play within such a globally crucial context, and it is their ambition to realize that vision that makes us proud to partner with the pioneering team as they work to unlock the digital potential of the financial industry in the region.”

This marks the second investment that Wa’ed has made in the startup after leading Wahed’s $25 million Series A funding round in 2020, along with BECO Capital and Cue Ball Capital. 

Ali Rahimtula, a Partner at Cue Ball Capital, commented, “This raise will help support Junaid and his team’s mission to bring financial services to this important yet underserved demographic. We are looking forward to Wahed’s next phase of growth.”

“We continue to strengthen our relationship with Wa’ed and HSBC as we enter this next growth phase. I’m extremely excited for this next chapter as we aim to make the Wahed platform a one-stop-shop for ethical banking and investing tools. We hope to eventually create a fairer and purer financial ecosystem built for everyone,” said Wahed’s Chief Executive Officer, Junaid Wahedna. 

June 16th 2022, 6:30 pm

Egypt's Boyot raises fresh funding to digitise real estate payments

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Egypt-based Boyot, a startup that offers an end-to-end operating system for payments and financial services focusing exclusively on the real estate market, has raised a six-figure pre-Seed round led by a Kuwait-based real estate firm.

The startup is set to open an office in Kuwait later this year.

Founded in 2020 by Mahmoud El Sabongy (CEO) and Khaled El Refaay (CTO) and Mohamed Sayed, Boyot enables real estate firms to digitise their entire payment operations, allowing them to track the status of their customer payment from the moment it is scheduled ultimately through to settlement. Moreover, companies can leverage the existing application programming interface (APIs) to provide and launch financial products such as buy now and pay later (BNPL).

"Poor cash flow management is one of the key challenges hurdling the growth of small and medium-sized businesses (SMBs) operating in the local real estate market in Egypt. About 85 per cent of merchants don’t get their receivables through cheques. Instead, they either send out agents to perform cash transactions or get the payment through a bank transfer. Irregular cash collection methods ultimately translate into lower margins. As merchants scale, the payment collection process becomes more and more complicated and far from straightforward, leaving businesses struggling with inconsistent gains," says ElSabongy.

The startup officially commenced commercial operations back in May. Shortly after, it onboarded Misr Asset Management Company, the real estate arm of Misr Insurance Company, as its first corporate client.  

According to ElSabongy, the startup plans to expand its client base, hire across tech and business as well as invest in its product technology.

The SaaS market has witnessed an upswing over the past few years, as digitisation continues to gain ground among traditional sectors. Of 3 billion raised by startups in the Middle East and North Africa region (Mena) last year, SaaS startups scooped a total of $176, 350,000 across 31 deals.

June 16th 2022, 7:56 am
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