Middle East-based Wadi.com raises $67 million2 min read . Updated: 16 Feb 2016, 01:31 AM IST
Saudi Arabia-based Al Tayyar Travel Group led the round of funding, investing about $34 million
Wadi.com, a Middle East-based online retail platform co-founded by former Jabong executive Pratik Gupta, said it has raised $67 million in Series A funding.
Saudi Arabia-based Al Tayyar Travel Group Holding Co. led the round of funding, the company said in a statement on Monday.
Wadi International General Trading LLC, which owns Wadi.com, is backed by the Middle East Internet Group, a joint venture between German Internet firm Rocket Internet SE and South African telecom services provider MTN Group Ltd.
Al Tayyar invested about $34 million and the existing investors put in the rest, said co-founder Ankit Wadhwa.
Wadi was founded by Gupta, former director of operations at Rocket Internet-backed online fashion store Jabong and former Mckinsey & Co. executives Wadhwa and Kanwal Sarfaraz, in March 2015.
The company, which currently caters to shoppers in the United Arab Emirates (UAE) and Saudi Arabia, claims to have more than 500 merchants—about 50 of them from India—selling more than 150,000 products from over 2,000 brands.
The company plans to use the funds to penetrate deeper into its existing markets.
“We definitely have plans to expand. But, if you look at the size of the market, Saudi is by far the biggest. We have neither saturated Saudi nor UAE. The Middle East market will grow to $40 billion by 2020. We will be expanding, but first we will look at sufficiently scaling up in the two countries we are present in. Immediate focus is to expand in the present geographies. These are 80% of the total market," said Wadhwa.
The average ticket sizes in the Middle East are relatively big, a factor that Wadhwa believes will help the company become profitable soon.
“Average order value in the Middle East is about ₹ 13,000-20,000. This is the holy grail of e-commerce, that if you have larger orders, you tend to hit profitability sooner because operations’ cost as a percentage of revenue comes down," he said.
“You are selling more in one box to a customer."
Wadi competes with local rivals such as Fouq and Rocket Internet-backed Namshi.
Apart from Wadi, the Middle East Internet Group has backed home services platform Helpling, real estate classifieds portal Lamudi, car classifieds portal Carmudi and ride hailing services Easy Taxi.
Some of the online marketplaces in Asia that have won investment from Rocket Internet include Daraz (which operates in Pakistan, Bangladesh and Myanmar) and Shop in Myanmar.
“The funding round for Wadi.com only 10 months after launch is a great proof of trust into our business," said Eyad Alkassar, chief executive at the Middle East Internet Group.
Al Tayyar’s support in cargo and logistics will make it “the perfect partner" for Wadi.com to continue its expansion in the Middle East, he added.