Startups in the Middle East and North Africa region raised $206 million in December 2021, marking an impressive 215% increase year-over-year.
With a marked shift in consumer behavior toward digital channels, products, and services, tech startups in seed and Series A rounds have gained traction. We look at a few startups with unique offerings aiming to create value for customers across the region.
The pandemic saw several startups in the mental health sector take off with specialized services for children and working professionals in high demand. MindTales, is a part of Abu Dhabi’s Hub 71 ecosystem, employing AI to make mental health more inclusive. MindTales launched an online digital wellness and counseling courses application version this year.
“Due to a global lack of access to therapy and counseling, 70% of people with mental health issues do not receive the help and care they require. This demand increased rapidly during the pandemic, reflected in the high demand for the services and tools that our MindTales application offers,” says Viktorija Aksionova, CEO, MindTales, UAE.
The pandemic came along with high levels of uncertainty: restrictions and social measures turned around many people’s personal and professional lives. Within the corporate world, more than 70% of employees have reported higher levels of stress and feelings of isolation and experienced lower levels of motivation and drive. “This increased demand translated into a monthly growth of 32% in terms of subscribers to the app, and to date, we have more than 70 000 active users. The impact it has had on the mental health of everyone is undeniable and will prevail in a post-COVID-19 environment. We expect our customer base to continue to grow,” adds Aksionova.
Launched in 2016 by Tarek Kabrit and Andrew Kabrit, Seez means a combination of “see,” referring to the enterprise’s image-recognition software, and “seize the moment,” referring to a car buyer’s search for the best deal. Seez offers users an AI-integrated platform to buy cars from official dealers and individual resellers. Today, it has 1.6 million users and almost 500,000 vehicles listed on its platforms, making the company among the world’s largest online sites for cars.
“Like most online and e-commerce platforms, the pandemic accelerated our growth. We have remained agile, navigated challenges, and evolved as a business to respond to changing consumer demands. We saw an opportunity to transition our business from a high-tech automotive search engine into a transactional e-commerce platform, offering AI and data tools for car buyers,” says Tarek Kabrit, Co-Founder and CEO of Seez
Global players in this space spurred significant growth during the pandemic, including Carvana and Cazoo, which achieved $72 billion and $8 billion valuations in 2021. “We quickly realized that if we were to operate an asset-light model, we needed to help dealers embrace digitization. We launched our Shopify store in parallel with our marketplace, which grew that side of the business by 300% annually.”
He adds that the support provided by Hub71 has allowed disruptive startups, including Seez, to grow and accelerate their journeys beyond the region. “We expanded our operations in Europe, and we have also been approached recently by the biggest automotive bank in Europe to partner on a pan-European level.”
Regarding plans on the horizon, Kabrit adds, “We have raised $21 million to date, and we’re currently raising another $20mn to fuel our European expansion. Being part of a wider community like Hub71 puts us close to other founders, angel investors, and regional VCs, giving us great confidence to follow through with our international ambitions. As such, we will continue to expand our European footprint, with plans to launch in Portugal and Scandinavia over the next 18 months.”
The on-demand industry has witnessed a boom over the past two years. With music, entertainment, and transportation available on-demand, essentials such as groceries on-demand have also seen a spike. Launched in October 2021, the on-demand grocery app Rabbit delivers groceries in under 20-minutes. In November 2021, Rabbit, which functions out of four locations within Cairo, raised $11 million in the region’s largest pre-seed round in MEA.
“The pandemic has irrevocably changed the way we shop. eCommerce grew by 29% year-on-year, and online grocery sales have gone up two to five-fold globally,” says Ahmad Yousry, Co-Founder and CEO, Rabbit.
And Rabbit’s growth is living proof of this trend. Launched in October 2021, the business is doubling month-on-month as customer habits continue to shift from offline to online. Rabbit raised $11 million last October, closing the largest pre-seed round in the Middle East and Africa region to date. “It took the company 130 days from idea to first order and five months to secure our license to expand into Saudi Arabia. Rabbit’s ability to grow while being profitable per order has been the fundamental driver of investors’ interest in backing the company in the current round of funding,” adds Yousry.
Distributors have faced several challenges throughout the pandemic with unpredictable market trends, unpredictable consumer behavior, and increased pressure on supply chains. Launched at the end of 2021, Egypt-based eCommerce startup Gahez operates as an online marketplace that streamlines the process between retailers and manufacturers, providing an improved online trading cycle. The B2B fashion marketplace has successfully raised $2 million in its latest funding round, the company announced in January.
“Gahez Market saw a great opportunity in the pandemic with customers relying on online channels more and more. We serve more than 19,000 fashion retailers across Egypt, providing them with an assortment of products from more than 150 different suppliers and manufacturers. The demand has been increasing dramatically throughout the past few months. More and more retailers are jumping on to grab the opportunity and join Gahez Market,” says Wael Olama, Chairman and CEO of Gahez Market.
Gahez Market came into fruition with the idea that blossomed from several prevalent struggles within the region’s B2B fashion supply chain. “Retailers in Egypt experience frequent difficulties due to a lack of visibility on market prices, limited access to wholesalers, and knowledge of ongoing offers and promotions from manufacturers. Gahez Market provides a one-stop solution to combat these problems,” says Olama.
The online platform links manufacturers and wholesalers with retailers while enabling retailers to purchase goods on credit. This expands the retailer’s reach, provides visibility on market prices, and amplifies the reach of wholesalers and manufacturers in the market.
“Manufacturers will benefit from this service by gaining instant access to market data, thousands of retailers, and even export markets. Gahez Market predicts substantial margin enhancements for its ready-made garment manufacturers. Likewise, retailers will take advantage of cash flow stability, transparent product pricing, easy access to credit, outsourced customer care, seamless logistics services, a wider selection of products, and optimal in-store inventory buildup,” he adds.
Egypt-based startup Mozare3 aims to link farmers with the gig economy by providing them with microcredit loans amid the current surge in mobile payments accelerated by COVID-19. It aims to be the one-stop shop where farmers can perform financial transactions digitally, such as paying bills, transferring money, and buying goods and services. Mozare3 closed a pre-seed round of $1 million last May and is planning to close its Series A round soon with the participation of local, regional, and global VC funds.
“As Egypt’s first agri-fintech platform, we offer direct contract farming between corporations and Egyptian farmers. We also offer embedded finance, providing farmers with pesticides and fertilizers instead of money. Finally, we provide agronomy support, teaching farmers how to produce high-quality crops through our app and with visits to farms by our agricultural engineers. We plan to also offer non-agri assets — from cows to refrigerators — to those farmers who prove credible enough to expand,” says Hussein Abou Bakr, CEO of Mozare3.
Currently operating in 10 governorates in Egypt, Mozare3’s goal is to expand to five more by the end of the year. “By 2023, we expect to be operating across the entire country. We serve around 3,000 farmers and hope to grow that four-fold by the end of the year and reach 100,000 farmers in 2023. We are very confident that Mozare3 will digitally transform this market and enable farmers access to finance and market information innovatively,” adds Abou Bakr.
With security concerns and identity theft issues on the rise, the need for authentic self-identification methods is crucial. Founded in March 2020, Faceki is facial recognition and identity verification platform that enables organizations to verify and onboard their users, especially in fighting fraud. Faceki uses AI and machine learning to power its certified liveness and anti-spoofing detection technology.
“The engagement level has been high and is increasing rapidly. We’re experiencing a high increase in demand for our cloud-based verification services,” says Hamza Al-Ghatam, CEO, Faceki. “This is due to the contactless preferences, and identity verification comes in handy. In addition, we provide a higher layer of security for businesses against fraudsters and attackers. We had a 6,000% increase in our customer base in the past 12 months compared to the previous year.”
Also, read about KAUST bringing five global deep tech startups to Saudi Arabia, here.
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