Recent research means that the e-commerce market in Saudi Arabia, UAE and Egypt account for a mixed $21.4 billion and is projected to develop by greater than 50% to $33.3 billion within the subsequent three years. And as MENA consumers improve their commerce spending, it’s more and more changing into crucial for on-line shops to place themselves to take full benefit of the rising phenomenon.
FlapKap, utilizing its revenue-based financing platform (RBF), helps these shops resolve the growth-destructive challenges that rising on-line shops encounter when making an attempt to satisfy buyer calls for. The firm, which permits e-commerce companies to scale and develop by focusing on companies with restricted financial institution or enterprise financing entry, is saying that it has raised $3.6 million in seed funding to supercharge its efforts.
Ahmad Coucha and Khaled Nassef based FlapKap in 2022; Sherif Bichara and Adel Hodroj are on the founding staff. It was throughout Coucha’s time at Kijamii, a digital company upstart he launched in 2014 that carried out initiatives for Fortune 500 firms, that the CEO seen late cost and entry to working capital points companies, together with his, confronted. For occasion, most of Kijamii’s shoppers at all times paid late, generally 30 to 120 days from when a sale closed.
“We always thought to ourselves that this should be the exact opposite. Big clients with massive amounts of cash shouldn’t be the ones that get super flexible payment terms from the agencies; it should be the small and medium enterprises struggling for cash and growth. These should be getting the support,” CEO Coucha instructed Thealike.
In 2021, Coucha spent a while within the U.S. and witnessed the rise of revenue-based financing platforms within the nation and the West, together with Clearco and Wayflyer. The concept to duplicate an analogous operation for MENA popped up, therefore the launch of FlapKap. The firm serves primarily SaaS and e-commerce platforms identical to most revenue-based financing firms however has extra clientele on the previous than the latter.
E-commerce operations have versatile cost phrases that swimsuit FlapKap’s enterprise as they spend loads on promoting, advertising and stock, recurring actions liable for these manufacturers making late funds or taking loans to stay operational. “SaaS is still growing in its early stage in the Middle East, but it’s not yet sizable. On the other hand, e-commerce is booming in all parts of the world, and is underserved by the current finance infrastructure in the Middle East and Africa,” he added on his firm’s choice for e-commerce manufacturers in each areas.
FlapKap’s enterprise mannequin is one the place it funds e-commerce platforms’ expenditures and recoups its cash when these manufacturers pay again a proportion of their revenues till compensation is full. In different phrases, FlapKap provides a set charge — break up to be paid in percentages from their revenues inside a selected timeframe — to no matter quantity its shoppers entry on its platform. FlapKap claims to have helped generate greater than an 85% improve in income and over 70% improve in web earnings inside a number of months for its prospects.
The revenue-based financing firm for e-commerce platforms, which claims to be rising 300% quarter over quarter, additionally talked about that it has partnered with tens of shoppers from Egypt and UAE in six months. Some embody Dresscode, Raw African, Palma and Tam’s Shoemaker. FlapKap has additionally not too long ago built-in its AI-based insights and monetary information analytics with Shopify, WooCommerce, Facebook and Google, and expects to strike extra partnerships, it mentioned in an announcement.
“Aside from the financing solutions we offer our partners, we also give them other value-added services to help them go further. So we always like to position ourselves as a growth partner; we’re not just financing,” mentioned the chief government. “We want to drive growth. We have a model work in progress built for identifying the clients’ growth potential; it’s a model we are currently building and getting enhanced daily by the data we’re collecting.”
This newest capital injection comes six months after FlapKap’s pre-seed elevate and the buyers on board are strategic for FlapKap. QED, for example, has invested in a few of FlapKap’s world counterparts, reminiscent of Wayflyer and Fairplay. The fintech-focused enterprise capital agency used Bolt, its arm for investments within the Middle East, to finish the transaction. There’s additionally Egyptian government-backed Nclude, legacy Pan-African investor A15 and Outliers. “I’m excited to be building FlapKap along with them,” mentioned Coucha. “I think they are not just investors; they are real partners in what they’re doing for us now and expected to do in the future as well,” mentioned Coucha.
With the brand new funding, FlapKap plans to extend its capability to assist extra e-commerce companies within the MENA area scale and maximize their development potential, in addition to consolidate its place because the area’s main revenue-based financing participant. The firm goals to solidify its presence in Saudi Arabia, the UAE and Egypt by providing e-commerce companies the flexibility to scale their stock and digital advertisements now, whereas flexibly paying later. Gbenga Ajayi, a companion at QED, commented on the funding: “Having invested and worked with similar companies to FlapKap across other regions such as Europe and Latin America, we are confident this team can attain similar success.”