Expect the unexpected
Colak and his wife, Dunia Othman, had been struggling to raise cash for their startup for the past year. They pitched to investors at Womena but couldn't find what they needed. They launched a crowdfunding campaign on Eureeca but only raised 30 percent of the required amount.
“Many investors want[ed] quick returns and as an online business, we need to grow then we can give returns,” Colak said. “Investors here are seeing more value in tech products and our product is not a real product.”
So, imagine their surprise when a casual conversation with the wife of former NBK Capital Partners CEO Amjad Ahmad at the TECOM SME Builder led to a meeting with Ahmad himself, who pledged $351,000 in a seed fund round.
The investment, which officially closed on August 1st, is the first for Colak and Othman, whom I had the chance to meet at Mix N’ Mentor Dubai last December. They had 3,000 service providers back then, a roster that they’ve since managed to grow to 4,000.
Add 10,000 active users and 200 service categories, they started to notice seasonal shifts in user demand. In summer, “we noticed that AC repairs and pest control [services] were getting popular,” Othman said, while their most popular categories remained cleaning and maid services.
With the new seed investment, the team plans to spend more on marketing. They recently hired two interns to focus on building relationships with their clients and expanding the platform’s database. While mrUsta wishes to make money by charging clients a fee of two to three dirhams ($0.50 to $0.80) for every call the client gets from a customer, they’re not activating the paid feature just yet.
“First, we want to increase our visitors and make people understand our model,” Colak said. “Now it’s free for everyone to use.” He hinted that they may activate the paid feature with the release of their new website in November, which Colak promised to be more responsive and include a live chat.
In addition to developing iOS and Android apps, the team aims to expand into Saudi Arabia.
“Scaling to Saudi Arabia is very different,” Othman noted. “When we go, we need a strong partner, or to partner with a telco or a bank.”
Currently, mrUsta is a part of regional accelerator Afkar.
“They are helping us pitch to potential partners and telecom operators and we’re making our connections [in Saudi Arabia] through Afkar,” Colak said.
Source: Wamda Capital