Sharwa, a social commerce platform offering quality household essentials via a gamified group buying shopping experience, has raised $2M in Pre-SEED funding round to make retail affordable.
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Egypt-based social commerce platform, Sharwa, has closed a Pre-SEED funding round for $2M. The round was co-led by Nuwa Capital and Hambro Perks Oryx Fund and joined by several strategic angel investors. Founded in 2022 by Alaa Shalaby, Hassan Elshourbagi, and Mohamed Hanafy, Sharwa Sharwa aims to address the gap between a large number of social media users and the low levels of E-commerce adoption in Egypt. It allows customers to purchase their essential household items like groceries and appliances at affordable prices through its app.
As recorded in our Egypt H1 2022 Venture Investment Report, Egypt has recorded a 106% YoY growth in VC funding this year compared to H1’21. The Egyptian VC space is gaining more and more traction as startups develop digital and tech disruptions to cater to underserved segments and enhance traditional industries like retail. Reflective of the need for digitization, it was FinTech, Transport & Logistics (T&L), and E-commerce that closed the lion’s share of investments in 2021, accounting for more than 50% of all deals closed over the first half of the year. Sizable investments have been deployed backing FinTech and E-commerce solutions including $50M in PayMob and $25M in Brimore. Egypt has also seen a significant increase in the deals recorded in the $1M-$5M bracket size, almost 50% of the total transactions were recorded in this bracket showing an increase of more than 35% from last year.
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Inflation has put a strain on households globally, where customers are looking for access to more affordable products. Sharwa aims to help customers do just that, starting with Egypt. Sharwa’s platform allows customers to get the best prices for their daily purchases on household essentials like groceries, appliances, and homecare. Customers can club their baskets into a group order and place them through Sharwa using WhatsApp or directly on its app, unlocking wholesale prices from manufacturers for next day delivery. Alaa Shalaby, Chief Executive Officer, said: “The experience we aim to deliver is similar to going to a hyper market with family; one person is pushing around the same cart and everyone is able to throw things in. In our model, you all benefit from the cheap prices unlocked. Our customers love our service as a tool to help them fight inflation.”
In order to provide service in remote areas, Sharwa works with local community leaders, who have been Super Users of the service, to collect orders in their area. Customers can buy products at two price points - alone or in a group. Group prices reach up to a 40% discount when compared to retail prices; the discounts are unlocked when a customer invites someone to buy with them or joins an existing group created by other customers. Arnav Danthi, Nuwa Capital, said: “Throughout our conversations with Alaa, Hassan and Hanafy, we were impressed with each individually. They were each operationally experienced and had extensive experience scaling leading, regional tech startups. It was their combined team dynamic, camaraderie, and deep passion for their business that finalized our conviction.”
The Pre-SEED investment will be spent on the continued development of the technology platform and on expanding the team. Sharwa has a 12-month expansion plan to enable service in the rest of Egypt. “We’re excited to support a platform like Sharwa, which has identified a key challenge for today’s consumers in Egypt and is addressing it by leveraging technology and social connection. The leadership team has proven experience at innovative and successful consumer businesses in the region and we look forward to seeing how they grow the Sharwa platform.” Ivo Detelinov, Hambro Perks Oryx Fund, concluded.
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