In a mix of Equity and Venture Debt, the Saudi-headquartered and MENAP servicing B2B startup Retailo raises $36M in its Series A to expand its effort in digitizing local retail supply chains
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KSA-based and MENAP servicing B2B startup Retailo has successfully raised $36M in its latest funding round which was a mix of Equity and Venture Debt. With more than 80% of the round amount raised in Equity, the Series A round was led by Silicon Valley-based Graphene Ventures joined by leading investors that include 500 Global, Agility, Aujan, Tech Invest Com, and Mentor’s Fund, all of which have the relevant exposure and investments in the retail industry’s technology companies. The venture debt was raised from Nahda Fund - one of the Middle East’s first venture debt fund which is backed by IMM Investment Global, based in Hong Kong. Additionally, Shorooq Partners, Abercross Holdings, Arzan VC, AgFunder also participated in the round as repeat investors which demonstrates their continuing belief in Retailo’s successful future.
Headquartered in Riyadh, Retailo was founded by former Careem executives Talha Ansari, Wahaj Ahmed, and Mohammad Nowkhaiz in July 2020 with a unique regional launch digitizing the region’s retail supply chains. On Retailo’s mobile platform, small businesses can find a wide catalog of over 5,000 SKUs which are delivered to their doorstep in less than 24 hours. They can also benefit from Buy-now-pay-later (BNPL) services, which give them flexible payment options and credit lines. By providing timely supply, competitive rates, and easy credit, Retailo is able to address the needs of retailers and significantly improve their business.
As recorded in our State of Startup Funding-Emerging Venture Markets 2022, the E-commerce space across MENA, Africa, Pakistan & Turkey has accounted for 10% of all transactions in 2021. Observing more than 90% YoY growth in funding, E-commerce startups across EVMs have crossed the $500M mark in VC funding throughout the year, showing promising signs and emerging VC trends. One exciting VC trend has been investors’ appetite for B2B solutions with the likes of MaxAB and Capiter in Egypt, Bazaar in Pakistan, and Chari.ma in Morocco raising major rounds in 2021. Saudi-based E-commerce startups raised the lion’s share of funding, accounting for more than 30% of all VC capital deployed throughout the year as recorded in our 2022 KSA Venture Investment Report. Of the top E-commerce funding rounds, it was startups that have been rolling out financing and payment solutions that gained traction over the past year, with wholesale marketplace Sary, and Try-Now-Buy-Later pioneer Nejree highlighting the top funding rounds in E-commerce 2021.
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Retail in MENAP is a $500 billion industry that consists of over 10 million small businesses to serve a population of more than 700 million consumers. However, the majority of this retail industry is informal and undigitized. Small businesses have to rely on inefficient supply chains and limited financial resources while operating on impossible margins. Retailo aims to champion these small business owners by building a suite of technologies around them. The company has begun this via their B2B community commerce platform which is used by over 50,000 retailers monthly. “As global supply chains come under stress pushing up commodity prices and depressing GDP growth, the value of smart supply chains becomes even more important,” said Retailo’s CEO Talha Ansari. “The retail sector serves 700 million persons in MENAP, contributes almost 20% to the GDP, and employs tens of millions. By providing technology solutions to this underserved market, we are not only improving lives but also uplifting the economy of the entire MENAP region.”
To offer a one-stop-shop solution, Retailo directly works with hundreds of leading local, regional, and global brands. Retailo also optimizes end-to-end logistics in the supply chain via efficient warehousing operations and smart fleet management solutions. Growth has been quick and in only 18 months Retailo has scaled to 10+ cities in 3 countries: KSA, UAE, and Pakistan. “The multi-market strategy from day one was unconventional and challenging. Covid made it even more so. But now Retailo is a scalable organization with hundreds of millions of dollars in annualized revenue and colleagues from multiple nationalities and diverse backgrounds who have left leading institutions like Amazon, Delivery Hero, and Goldman Sachs to fulfill Retailo’s mission in building technology that empowers 10 million retailers in the region,” said Himag Vaidya, Retailo’s Head of Strategy.
Leveraging its wide regional presence, Retailo has recently begun offering its sellers a cross-border distribution platform across the three biggest markets in the region: KSA, UAE, and Pakistan. Retailo also provides data analytics services to sellers to help them evaluate sales performance and consumption trends. The Series A funding will help Retailo move into the next phase of expansion into new geographies, verticals, and products. In light of this scaling investment, Nabil A. Borhanu, partner at Graphene Ventures concluded, “We are impressed with what Retailo has achieved in an astonishingly short time. Their vision is both ambitious and inspiring and we believe that partnering with them is a sound business investment and also a chance to truly improve the lives of millions of people.”
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