On a mission to simplify trade between buyers and suppliers of perishable food products across the Kingdom, the KSA-based B2B online marketplace Qawafel raises $3M in their seed round
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Riyadh-based B2B online marketplace Qawafel raised $3M in its latest funding round. The seed round was co-led by AlSayed Group and Khwarizmi Ventures, in addition to a number of angel investors.
Founded in the last quarter of 2020, by co-founders Turki AlAyyad (CEO), Walid Al-Ghobain (Chief Partnership Officer), and Qays Bahurmuz (Chief Product & Technology Officer) Qawafel is a B2B tech-enabled startup linking suppliers to various buyers and points of sale in the confectionery and refrigerated market. It provides integrated technical solutions aimed at enhancing the fragmented wholesale market through a full-stack B2B platform and digital services, offering a seamless user experience for both customers and vendors when managing operations. This in turn contributes to promoting local production and raising the efficiency of the market’s supply chains through seamless last-mile delivery and payments collections.
Funding in the E-commerce space across MENAPT has made big strides in the past few years, growing by 230% since 2017. This year alone, the E-commerce industry raised more than 12% of all capital deployed across MENAPT, ranking as the third most-funded industry after T&L which raised the lion’s share of investments this year (30%) and FinTech. On top of investor target lists over the past year, were E-commerce startups that have built market-tailored offerings, integrating financing and logistics solutions to create holistic services. This could be observed in the growth of B2B E-commerce solutions across MENAPT from raising 7% of total deals in the industry in 2017 to more than 17% in 2021. It is apparent that a great driver to this success was in the intricacy of the product offering; startups like KSA-based Sary were able to integrate FinTech into their offerings to allow buyers room for financing. Seeing the importance of such integrations, the Morocco-based B2B marketplace Chari.ma acquired Karny.ma to provide crediting and bookkeeping solutions for its users, and this FinTech/E-commerce hybrid offering has taken off in other geographies as well. In Pakistan B2b marketplaces like Bazaar, Tazah, and Dastgyr have all integrated FinTech solutions from crediting and micro-crediting, to loan management platforms and digital ledgers.
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Today Qawafel serves more than 5000 points of sale in more than 188 cities and towns in Saudi Arabia and has maintained a sales growth rate of 30% per month. Mr. Turki AlAyyad, CEO of Qawafel, commented in this regard saying: “Qawafel started in the confectionery and chocolate market, where sales are estimated at 5 Billion Saudi Riyals annually and acquired approximately 1% of the said market in a short period as 500 tons of chocolate were processed and passed around the cities of the Kingdom. We aim to expand vertically in the confectionery sector in general, where annual sales exceed 20 Billion Saudi Riyals.”
Qawafel provides a “market data” service that aims to help and support small factories in the process of creating and innovating new products. The startup has enabled more than 300 local factories, which has contributed to increasing the average rate of orders in these factories. Abdulaziz Al-Turki, the Managing Partner at Khwarizmi Ventures, further commented, “The HoReCa space is exhibiting constant growth and high activity. Turki and the Qawafel team are dedicating great efforts in defragmenting the confectionery wholesale market, easing supply chain management for both buyers and suppliers, and creating great positive local impact.”
Qawafel plans to use the fresh funding for three verticals. Towards the operation and growth of its business, towards R&D to improve and create new products/services, and towards entering new sectors and markets by the end of 2022, an example of which is the frozen food industry. “Qawafel’s vision is to provide the needed technical and logistical solutions to move the chilled food wholesale market to e-commerce and to enable small family businesses and shop owners to expand and have a presence in new areas. By achieving this, Qawafel aims to support locally made products and contribute to enhancing aspects around national food security” concluded Turki AlAyyad.
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