Let’s make a bet about who’s the next Swvl!

Let’s make a bet about who’s the next Swvl!

This month I decided to grab a Zoom coffee with Taker. Its founder Abdullah Alsaadi spoke to me about how they’re re-empowering restaurants and why Taker is keen on collaborating with its competitors. More below.

 

We’re still not yet over the fact that Swvl is the region’s first $1.5B+ tech startup to go public on Nasdaq… and I believe we will certainly see more similar SPAC listings in the future. So, who’s next? Share with me your tips and let’s bet!

 

P.S. We will kick off the 2nd round of our Seed program with #RIYADH_Seed_02 (September 19-23). Startups from Saudi 🇸🇦 register here.

 


 

Taker is taking it to the next level through its open platform

 

Hasan: Taker is an online ordering system for restaurants – and much more. Can you tell us what Taker brings into the market?

 

Abdullah: Taker’s product offering can be split into 3 components: It has the ordering component, which includes website, application, social media channels, etc. The second component is growth – strategy, marketing tools, etc. The third component is logistics and it can be broken into 3 different models: outsourced, in-house and hybrid logistics.

 

At Taker, we say that we don’t just give you technology; we don’t just give you an application―we do give you that of course, but we also become your growth partner and provide you with support services. Why? Because we want to avoid a situation when you go online and unfortunately fail.

 

Hasan: How was the past year and a half for Taker? Did it surprise you? Did you take advantage of it?

 

Abdullah: We had anticipated the move towards having control back in the hands of the restaurants. The restaurants lost this control years ago in the favor of food aggregators. When we launched Taker, we knew there would come a point when restaurants would begin planning to retain that control again. Our initial anticipation of this move had been for 2022-3, but covid has speeded up that process, which ended up being in our favor. It basically saved us 1-2 years. So, today, restaurants are much more aware of the importance of being dependent on themselves and having their own digital channels.

 

Hasan: How are you getting ready for whatever comes next?

 

Abdullah: We love competition. We want competition. We believe we cannot solve the problem by ourselves―no one can―because the problem is much bigger than we think. It comes down to education, operations, logistics… Also, we would really like to collaborate with our competitors, because Taker is present in a new market category and we want to make this category bigger.

 

Also, most of our competitors (we don’t have many) think that in order to solve the problem you only need to provide a website and application, but this doesn’t work. You must have more to offer in your package. What is the biggest problem we’re trying to solve today? It’s not an application or website; it’s logistics. If we can solve the logistics issues perfectly, then the problem will be solved. That’s why we have TakerGo, which is our logistics arm.

 

 

Restaurants using Taker are spared of many headaches and burdens; they no longer need to go and negotiate with every single logistics company; we got that covered in our agreement.

 

One of our early goals was that we wanted restaurants to enable delivery with zero CapEx. Second, the solution had to be scalable and, third, it had to have a high success rate.

 

In order to solve the driver availability problem, we looked at the aggregators and their success rate. We found out everyone has a failure rate (which is normal). However, the aggregators’ failure rate was about 15% (i.e.,15% of all orders failed to be delivered), sometimes it went up to 60% (on Eid holidays, etc.). So, we built the product in a way that made all the companies work as one pool of drivers, which has helped us to increase the delivery success rate up to 97-98%. In fact, some of our clients have a success rate of 99.5%. And we keep working on further improving the delivery service. We didn’t only solve the problem faced by restaurants; we also solved the problem faced by delivery companies. That’s TakerGo.

 

Hasan: Since you mentioned the success rate, what is your personal secret to success? What’s your philosophy?

 

Abdullah: Our vision is to create a balance point in the market. I always tell my team: “We are not in the business of selling apps; we are disrupting the market and we have to give the control back to the hands of restaurants.” We don’t believe that aggregators will vanish; they’re here to stay. We are realistic in our planning, we have always managed the expectations of our clients and we got a great team.

 

There’s one thing I would like to stress again: we really believe in collaboration with other players in the market, and that’s why we’ve decided to have Taker as an open platform and to give access to 3rd parties’ innovations. We welcome anyone to build on top of our platform or simply integrate (i.e., delivery company/service integrates with TakerGo). Being an open platform is very important in achieving our main goal of creating a balance within the food delivery market. And, obviously, we cannot do everything by ourselves. It doesn’t matter how strong we as Taker are; the problem is much bigger and we can’t do it alone.

 

Hasan: We’re excited to be part of your journey!

TL;DR (too long; didn’t read)  
Taker is not only an online ordering system for restaurants; its product offering is made of 3 components: ordering, growth and logistics (TakerGo). Its aim is to create a balance point in the market and give the control back to the hands of restaurants. Also, Taker wants to collaborate with its competitors because they can’t create that market balance by themselves.

 

Family Postcard

 

🔥 Most funded

According to Forbes Middle East, iKcon was among the most funded startups in the first half of 2021, making it one of the hottest startups in the region.

 

🔥 Top 101

FlexxPay made it to the top 101 UAE FinTech startups.

 

Cartlow -> B2B

Cartlow launched a B2B wholesale marketplace for retailers and wholesalers to source pre-owned and discounted inventory, which includes overstock, returned, refurbished and liquidation inventory.

 

 

At the ministry

Repzo signed an agreement with Jordan’s Ministry of Digital Economy and Entrepreneurship that will help them to implement plans and export corporate services and products to new markets.

 

🏋️ The Olympics buzz

Crowd Analyzer put together the top insights from over 2M social media activities related to Tokyo Olympics.

 

 

Latest Jobs @ ArzanVC Family

 

  • Head of Customer Experience at Gameball
  • Sales Manager at Retailo (Riyadh)
  • Shopify UI/UX Developer at Citron (Russia/remote)
  • Outbound Telesales Executive (OTE) at FlexxPay (Beirut)
  • Chef De Partie (CDP) at iKcon (Dubai)

 

 

So, who’s gonna be the next Swvl of the region? 😉

Hasan

 

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We are at the end of our teenage years

We are at the end of our teenage years

Did you also notice the incoming international investors who are injecting big amounts of money into our local startups? We wonder what these foreign millions mean for the local market ― if anything at all… Some good food for thought in this month’s newsletter.

 


 

We are becoming mature, ladies and gentlemen

 

$654 million. The volume of venture investment in the Middle East in 2020. That’s what made it a record year.
$959 million. The volume in H1 2021. Almost a billion dollars was poured into 241 startups across the region. The record volume of 2020 was surpassed.
$415 million. The largest ever investment into a MENA startup, announced on July 1st (Kitopi). So far, the total investment volume for 2021 is $1.38+ billion. What’s next?

 

Well, our local startups definitely don’t suffer from lack of capital these days. We see deals happening on a daily basis because the process got faster. Everyone you want to pitch to is available on Zoom in a matter of days, sometimes even hours.

 

But what does the recent influx of big, international VC money into the region mean? Let’s take a quick look at some of the recent deals (timeframe April-July 2021).

 

  • the region’s largest pre-Seed round to date (Telda) (also the 1st investment of Sequoia in the region)
  • the region’s largest Series A round to date (Tamara)
  • the region’s largest ever startup investment to date (Kitopi)

 

 


The fact that the international investors no longer only eye the region from the outside but they’re increasingly participating – if not leading – the rounds means that the market is certainly attractive and poised for growth. And maturing.

 

These investors may not have had an active strategy to focus on the region in the past, but they’re surely working on it now. And, while previously they’d be deploying in Series C or later, right now they’re shifting their attention towards earlier rounds. They’re also focusing on co-investing along with local funds because this will help strengthen their footprint in the region. Kitopi is the first investment of SoftBank’s Vision Fund 2 in a MENA-based startup. The first of probably many more to come.

 

What should be in it for the startups (apart from money) is an access to a large pool of global managerial (and C-level) know-how. What should be in it for the market in general is a more informed valuation and, hence, better valuation validation. Or is that my wishful thinking? In my previous experience, I have seen international VCs investing small tickets (relatively) with very minimal due diligence. This can hurt the ecosystem.

 

We can all agree that the recent big rounds are skyrocketing the total value of investments in the region, and I noted above that the presence of international investors should render a better valuation validation, but – food for thought – could these new players actually be contributing to the already-established precedence of overvalued rounds?

 

Also, the big rounds may push some startups very high up while leaving others on the ground. This could cause less competitiveness in the ecosystem as the startups with smaller valuations might not be able to keep up with the chosen few in the long run. On the other hand, if a startup raises more capital, it will be forced to grow much faster to reach the expected valuation by the next round, and that may cause unnecessary pressure on the team. In an opposite scenario, when the startup doesn’t get the luxury of big cash injection, the team will work harder to enhance its tech and core offering.

In all cases, the growing presence of international investors in our local waters is a sign of maturity of our ecosystem. We’re at the end of our teenage years.

TL;DR (too long; didn’t read)  
We took a look at 7 distinct founding rounds that happened since April until today. They include the region's largest pre-Seed and Series A rounds as well as the region's largest ever startup investment to date. Tamara, Telda, Tabby, Trella, Eyewa, Kitopi and MaxAB. What unites them is the growing footprint of international investors. And we believe that this recent influx of big, international VC money into the region means that the local ecosystem is nearing its maturity.

 

Family Postcard

 

Swvling in Saudi

Swvl expanded to Saudi Arabia, which makes it its sixth market following Swvl’s success in Egypt, Kenya, Pakistan, Jordan and the UAE.

 

Yumm awards

MUNCH:ON was awarded ‘Best Food App of the Year’ by Entrepreneur Middle East.

 

Fashion awards

Mejuri was named Accessory Designer of the Year at the Canadian Arts & Fashion Awards (CAFA), the biggest night for Canadian fashion.

 

 

On Asharq News

Fatura‘s Co-founder & COO Ahmed Anwar spoke to Asharq News الشرق  about Fatura’s expansion strategy and the upcoming milestones.

 

Main sponsors 😎

Qoyod partnered with Riyadh Chamber of Commerce & Industry as the Main Sponsor of Riyadh Commerce Magazine (June 2021 issue).

 

Latest Jobs @ ArzanVC Family

 

  • Country Manager at TruKKer (Muscat)
  • User Acquisition Manager at Tamatem (Amman)
  • Product Manager at Qoyod (Cairo)
  • Performance Manager at Swvl (Cairo)
  • Sales Lead (Sr Corporate Sales) at Swvl (Cairo)
  • Growth Specialist at Fatura (Egypt)

 

 

Enjoy the Eid break!

Hasan

 

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The startup ecosystem beyond army checkpoints

The startup ecosystem beyond army checkpoints

It’s all about tech startups in Palestine this month. A very dynamic ecosystem that’s growing in the shadows of its neighbors. Rewriting the headlines out there. Did you know they have quite a strong healthtech and agritech base?

 


 

Palestinian tech startups 101

 

Youth unemployment in Palestine will likely peak at 50% in this year’s PCBS census. That’s half of Palestinian youth (18-29y) being jobless. Many of them are university graduates who usually don’t have any other choice but to start their own business and become self-employed. Luckily, there’re quite a few support programs, catalysts and incubators available to entrepreneurs who need help to start off. But, as we know, there’s never enough of such support.

 

What’s remarkable about the Palestinian startup ecosystem is its large presence of highly educated, young founders and high proportion of female founders in particular. It’s also quite fragmented (geographically) and this impacts the interactions among players. A recent report states there are no more than 300 tech startups, another source says 50, while our research discovered 73 active tech startups. These discrepancies portray the dynamics and volatility of the market.

 

The local ecosystem has been growing in the shadow of its neighbors (or sometimes merely surviving). At least virtual ideas know no physical army checkpoints that daily restrain most of the local businesses, their owners and staff. (Although, before 2018, there was no 3G service, which slowed down even the virtual advances.)

 

Yet the recent outbreak of violence shook the already fragile foundations of the local startup scene. Many businesses lost offices, equipment… and the most valuable: staff.

 

International institutions have pledged support to reconstruct Gaza’s infrastructure and continue building the local digital economy. This includes a $30-million grant from the World Bank.

 

Due to financial and import-export difficulties and restrictions, most Palestinian startups must work with what they have at hands: solutions, infrastructure and funds. Some say it’s still the best to get funds from Triple Fs: friends, family and fools. Well, it’s time to add new letters.

 

Since most local startups provide solutions to everyday needs, they are not able to focus on business opportunities that lay beyond. Covid-19 helped boost the local e-commerce and pushed many businesses to start offering online deliveries for groceries and electronic appliances for the first time. It’s a win-win for both retailers and consumers thanks to the rising internet and social media usage.

 

 

A great number of the 73 active tech startups addresses healthcare issues – be it through telemedicine (Tebfact, Tanaffas), appointment booking system (Doctor On Time), prevention of chronic diseases (Wikaya, Dawsat) or cancer treatment technology (SynergyMed).

 

Startups focused on agriculture, environment and energy are fairly abundant, too. We came across businesses providing a solar energy system for housing (SunBox), clean water (Mayet Al Ahel, Blue Filter), fertilizers created from CO2 emissions (Greeners), water networks monitoring (Flowless), the first plantable plastic in the world (WhiteSapphire) and enviro-friendly construction materials (Greencake). Plus, in April, 23 green startups from Palestine were selected by GIMED (a “Green Impact” program for the Mediterranean region initiated by EU) to receive training and assistance. Bravo!

 

Areas that hold great potential for growth are supply chain & logistics, transport and edtech.

 

Years ago, the founder of lingerie e-commerce Kenz Christina Ganim said that there’s a new startup on the scene every month because Palestinians don’t want to read only headlines saying “Another new attack” but also “This Palestinian who succeeded”. More so now, in 2021.

 

What the local startup scene needs is:

  • Better mentorship
  • Greater support & capacity-building for the young talent
  • Stronger tech infrastructure
  • Increased early-stage funding (early-stage funding reached only $10,960 per startup in 2017-H12019)
  • The ability to secure offices in other nearby countries to ensure stable operations in tough times. This entails government support in different logistical matters.

In our research, Palestinian tech startups cover businesses founded in Palestine and/or businesses founded by Palestinian entrepreneurs and operating in Palestine.

TL;DR (too long; didn’t read)  
We discovered 73 active tech startups in Palestine, but the numbers vary since the ecosystem is very dynamic. Many startups fail due to lack of early-stage funds, infrastructure and mentorship. A handful thrives, especially in healthtech, agritech, e-commerce and services. Potential lies in supply chain & logistics, transport and edtech.

 

Family Postcard

 

Starring on CB Insights

FlexxPay appeared in CB Insights’ State Of Fintech Q1’21 Report. (And so did we 😎)

 

It was a feat indeed

Retailo spoke to Bloomberg Asharq Business اقتصاد الشرق about their founding achievements.

 

Conferencing in Dubai

CarSeer participated in the 3rd International Insurance Conference InsureTek Middle East 2021 held in Dubai.

 

Whatsapping with clients

Need to improve your WhatsApp communication with customers? Zid will tell you how.

 

 

Reverse is the way forward

Cartlow writes about reverse logistics in June’s issue of Logistics News ME.

 

🧘

Stress management tips by Classcard.

 

Latest Jobs @ArzanVC Family

  • Marketing Lead at Retailo (Riyadh)
  • Operations Manager at Retailo (Riyadh)
  • Technical Support Specialist at CARSEER (Amman)
  • Flutter Mobile Developer at CARSEER (Amman)
  • Data Engineer at Zid (Riyadh)

 

 

How’s your June going so far?

Hasan

 

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