After a 2-year decline in capital invested in the E-commerce sector across MENA, the sector observes a remarkable recovery with larger ticket sizes and a tendency towards B2B solutions. We explore the E-commerce top Series A rounds in MENA for this week's data drive:
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Despite being overshadowed by great strides in industries like FinTech observing a 44% YoY growth in number of transactions recorded, or F&B which made a comeback with Kitopi’s $415 Mega Deal, the E-commerce industry marked a notable recovery and opened doors for new venture prospects in 2021. As recorded in our E-commerce 2022 Venture Investment Report, the sector in MENA has observed a 235% YoY growth in capital invested over 12 more deals than the year before. This comes after the industry recorded dips in both volume of investment (10% YoY) and number of transactions recorded (26% YoY) in 2020. All three top geographies in MENA, the UAE, KSA, and Egypt observed investment growth in the sector over 2021, with KSA-based E-commerce startups raising the lion’s share of investment.
The prevalence of the E-commerce space in MENA and across Emerging Venture Markets could be traced in qualitative and quantitative attributes unique to the sector. On one end, the success of the B2B proposition which included the highest funding round of the year closed by Saudi B2B platform Sary regained investors’ focus and confidence in the sector. This trend also took center stage across Emerging Venture Markets, wherein Pakistan for example, major rounds closed by B2B startups Tazah Technologies and Bazaar accounted for 70% of all capital raised in the Pakistan-based E-commerce startups in 2021. On another end, the maturity of the sector in MENA was able to capitalize on the shift towards later-stage deals, where for the first time the proportion of E-commerce deals over $10M went from 2% in 2020 to 16% in 2021; this boosted average and mean sizes of funding rounds across the board. While the average size of Early-Stage funding rounds (Pre-SEED- Pre-Series A) observed a 160% YoY growth in 2021, Series A rounds attracted the largest tickets, where the average Series A round size almost tripled in 2021.
Showing healthy signs of maturity and the great strides MENA-based E-commerce startups took over the past years, we highlight the top 3 Series A rounds of the year 2021:
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The Egypt-based B2B that connects food & grocery retailers with suppliers across Egypt through seamless technology, MaxAB has raised the second-highest E-commerce round and the highest Series A round in 2021. Surely, the tendency for larger ticket sizes was reflected in Egypt as E-commerce startups observed an almost 400% YoY growth in capital investment over only 2 more deals than the year before. Heading this growth and accounting for more than 50% of all capital raised in the sector over 2021 was B2B E-commerce marketplace MaxAB, set to re-engineer and streamline the supply chain process in Egypt’s most underserved areas.
While the $55M Series A round marks an increase of 790% compared to its previous funding which was raised in 2019, prominent initial investors like BECO Capital, 500 Global, and Outlierz Ventures marked a promising start for the Egypt-based E-commerce team. Two years later, their scaling success brought upon the attention of major players including the IFC, 4DX Ventures, and Endeavor Catalyst to crown their position with the largest E-commerce Series A round recorded in 2021.
Another major win for the B2B E-commerce offering, Egypt-based Capiter raises $33M in 2021 to mark the second-largest E-commerce Series A round of the year. While focusing on a similar target market to its contender in the first place, Capiter goes beyond servicing FMCG retailers with on-demand SKUs and into providing credit solutions as well. The integrations of crediting solutions and other financial services such as BNPL not only helped B2B aggregators in making their platforms more sticky and boosted turnover rates, but also amplified investor confidence as FinTech-powered E-commerce offerings make for better acquisition targets in the least.
The Egypt-based B2B E-commerce team had gone through 3 funding rounds with initial investors Shorooq Partners and Foundation Ventures before closing its record-setting Series A round. As the company rooted its position in the market and proved for scale since 2020, the startup was able to raise its $33M Series A round with participation from key global and regional investors including MSA Capital, Quona Capital, and Derayah.
The Saudi-based online fashion & lifestyle marketplace Nejree closed its $15M Series A round led by Impact46 growth fund. Founded in 2018, Nejree set forth on a mission to transform the online customer journey and elevate users’ shopping experience. The e-commerce startup integrates technology to crack untapped opportunities in the user experience, the most remarkable of which is their adoption of the Try Now Buy Later model with their latest product release "Nejree Closet".
Both Saudi-based Fashion & Lifestyle marketplace Nejree and Egypt-based home servicing platform Homzmart closed their $15M Series A rounds in 2021. Both startups attracted a consortium of prominent investors including Impact 46, Nuwa Capital, Rise Capital, Teejan Technologies Co., and AlKhaila Investment Company.
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