Sary received $30.5 million from VentureSouq in a Series B financing, while Retailo received $6.7 million from Shorooq Partners in a seed round.
Sary received $30.5 million from VentureSouq in a Series B financing, while Retailo received $6.7 million from Shorooq Partners in a seed round.
Two rival Saudi business-to-business online marketplaces for retailers in the Middle East, North Africa, and Pakistan (MENAP) digitising the region’s retail supply chains have announced funding, indicating that the region’s start-ups are attracting more attention.
According to a press statement from Sary, the company raised $30.5 million in a Series B investment headed by VentureSouq and joined by new investors Rocketship. Vc and STV from the United States.
Meanwhile, Ra’ed Ventures, MSA Capital, and Derayah, all existing stockholders, contributed to the investment round.
Retailo said in a separate news release that it had secured $6.7 million in a seed round led by existing investor Shorooq Partners and UK private equity firm Abercross Holdings. After only nine months in business, Retailo, which former Careem executives created, has raised $9 million.
In the Middle East and North Africa, retailo is a $500 billion industry with over 10 million small companies serving a population of over 700 million people.
The majority of this industry, however, is unorganised and undigitised. As a result, small enterprises must rely on inefficient supply chains and limited financial resources to make ends meet while operating on unrealistic margins.
Retailo aspires to be a champion for small business owners by developing a portfolio of solutions specifically for them. They accomplished this using the company’s B2B community commerce platform, which is used by over 50,000 shops every month.
Small businesses can browse over 5,000 SKUs on Retailo’s mobile platform, delivered to their door in less than 24 hours. They can also take advantage of buy-now-pay-later (BNPL) financing, which will help them grow their firm dramatically.
Sary intends to use the funds to extend its geographic reach and services, including credit offers. Sary is the more established company, having launched in 2018, although both provide a platform that connects small businesses with wholesalers and fast-moving consumer goods (FMCG) companies.
VentureSouq Co-Founder and General Partner Suneel Gokhale said: “In Sary’s, we see this move into credit as immediately contributing to top-line growth, broadening revenue streams, and improving unit economics for a strong, proven vertical-specific technology firm.”
Since the pandemic, the entire digital ecosystem that we predicted would happen in ten years has transpired in months, indicating that everything digital is growing exponentially. Everything connected to the internet is exploding. So there’s a lot of new money and many new businesses.
Retailo’s Head of Strategy, Himag Vaidya, stated: “From the start, the multi-market strategy was unorthodox and tough. It was made even more so with Covid. Retailo is now a scalable organization with annualised revenue in the hundreds of millions of dollars and colleagues from a variety of ethnicities and backgrounds who have left leading institutions such as Amazon, Delivery Hero, and Goldman Sachs to fulfil Retailo’s goal is to build technology that empowers 10 million retailers in the region.”
There’s an influx of money in the market right now. Sovereign wealth funds are starting to invest in and seed more VCs, and indeed, there is a valuation bubble.”
According to Fadi Ghandour, CEO of venture capital firm Wamda, a rush to fund digital start-ups in the Middle East risks creating a valuation bubble.
According to Wamda data, 44 start-ups in the Middle East and North Africa raised more than $175 million last month, increasing $5 million from March.
Tamara, a buy-now-pay-later platform based in Riyadh, raised $110 million in Series A financing supported by renowned global payment processor MasterCard.
Thanks to that deal, Saudi Arabia topped the list regarding the quantity and value of start-up investments for the first time.
