Saudi-based RedBox raises $3M SEED
The Saudi-based Digital Logistics and LaaS (Locker-as-a-service) startup Redbox raises $3M to increase its network of traditional and smart lockers to facilitate the E-commerce boom in the Kingdom and beyond
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The Saudi-based logistics solution provider RedBox raises $3M (SAR 11.5M) in its latest funding round. The SEED round was led by Vision Ventures and included participation by RAF Investments and prominent angel investors.
RedBox was founded in 2019 in Riyadh by Thamer Altuwaiyan and Zun Phan to ease last mile delivery to e-commerce shops through its network of over 170 smart lockers around Saudi Arabia today. Thamer and his partner saw a clear problem in logistics services and the experience customers go through. Delivery companies call clients for the location of their home or business and don’t provide, yet, a pleasant experience to clients. In addition, the load on delivery companies continues to increase with the explosive growth of E-commerce in Saudi Arabia with no solutions to break the ongoing cycle of needing more delivery cars and drivers which ends up with congested roads and additional costs. In addition, many clients value their right to privacy and don’t want delivery drivers to come to their doorstep.
The Transport & Logistics (T&L) sector took off in 2021 as recorded in our State of Startup Funding- 2022 Emerging Venture Markets Report, available for download. Observing a 158% YoY increase in VC investment across MENA in 2021, the T&L space is becoming one of the most anticipated sectors coming out from the region. On one hand, it was sizable investments in Egypt-based Halan and Swvl, UAE-based iMile, and Lyve Global, as well as other leading Q-commerce, Freight Management, and Asset-Light Courier solutions across MENA. While digitized freight solutions and asset-light logistics networks raised the lion’s share of investment, T&L Early-Stage rounds ($500K-$3M) backed the emergence of value chain support Tech startups like AI-powered freight management platform Fero, outsourced fleet connector ILLA, and KSA-based LaaS (Lockser-as-a-service) Shuttle.
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RedBox solves these issues by completely re-engineering delivery into a pleasant all-around experience for both e-commerce shops and clients. RedBox provides clients with a low-cost alternative to receiving their orders. It also provides a safe logistical solution that ensures clients’ privacy is protected as no delivery agents need to know where you live or work. It also provides peace of mind to pick up your shipment at “your” convenient time instead of having to wait for delivery agents at their own convenience which takes hours today.
According to the latest study by BCG and Meta (previously Facebook) published in December 2021, e-commerce in Saudi Arabia has grown in the past two years by over 60% which is 2.5 times the average international growth rate. The current market size is estimated at SAR 19 billion with only 6% penetration versus the worldwide average of 18% which signifies huge growth potential. The market study also notes that efficient logistical services are one of the major potential blockers of that huge growth to materialize. RedBox is designed to solve the logistical bottleneck and is here to unlock eCommerce growth in Saudi Arabia and the region by easing up last-mile delivery. Thamer Altuwaiyan, Co-Founder and CEO at RedBox, said, “Last-mile delivery issues continue to be one of the biggest bottlenecks in coping with the increasing demand on e-commerce. There is no solution in sight as logistics companies continue to pour more cars and drivers into the mix in an effort to cope with demand. Our goal is to help e-commerce in opening up this bottleneck once and for all through a totally different approach with our technology and smart lockers.”
In addition to its easy-to-connect-to API, RedBox is vertically-integrated as the company utilizes a strong technology infrastructure for their order management and logistics operations — giving them a unique ability to control the end-to-end client journey by developing and delivering data-driven solutions. The company aims to use the funding to further invest in technology, cement its position in the current markets, and invest in talent. Zun Phan, RedBox’s Co-Founder and CTO said: “We are excited to bring the best technology available to the Saudi and MENA markets through the use of innovative logistical infrastructure that can provide our clients with many services to come. We are now focused on parcel delivery with e-commerce partners, but are soon going to launch other innovative solutions that will be game-changers.”
RedBox directly integrates today with Shopify, Salla, Zid, Magento, OpenCart, and other platforms. Over 9,000 e-commerce businesses use RedBox today and this number continues to grow daily. According to e-commerce partners, they save on average of 50% from delivery costs. 97% of clients who choose to deliver their orders through RedBox love it and have used it again several times. “We’re excited to support such a game-changing logistics solution provider in a market that is growing way above international levels. This growth demands innovative solutions that break the cycle and deliver on its promise, and RedBox does just that,” said Kais Al-Essa, Founding Partner and CEO of Vision Ventures.
RedBox recently partnered with Aramex, DHL, and AJEX. Many well-known e-commerce stores use RedBox today to offer their clients a more affordable and secure delivery option such as NiceOne, Golden Scent, Mokab, Lebara, and many others. With this platform-boosting investment, RedBox plans to reach 300 smart lockers by end of Q2, 2022 and 800 smart lockers by end of 2022 considering the current demand that RedBox is experiencing.
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