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Exclusive: Swvl’s last round (Series B-2) valued the company at $157 million

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Cairo-based transportation startup less than two months ago announced closing of it’s $42 million Series B-2 led by BECO Capital and Sweden’s Vostok New Ventures and joined by many leading international and regional investors. We’ve now learned that the round had valued the company at $157 million, making it one of the most valuable VC-backed technology startup of Middle East & North Africa.

Property Finder ($400 million) and Boutiqaat are the only two tech startups with a higher valuation, according to the publicly available data (or their own claim). Emerging Markets Property Group and Bayt are also likely to have a higher valuation than Swvl’s but they’ve never disclosed it.

Swvl’s valuation was revealed in a recently published financial report of Vostok New Ventures. According to the report, Vostok invested $16 million in Swvl’s recent funding round (Series B-2) for a 10.2 percent stake in the company. This translates into a valuation of $156.86 million.

Swvl last year had raised tens of millions of dollars in its Series B-1 in November last year at a valuation close to $100 million. This means that the valuation of Swvl increased by almost 60 percent in less than seven months.

Founded in 2017, Swvl connects commuters with private buses, allowing them to reserve seats on these buses and pay the fare through company’s mobile app. The buses available on Swvl operate on fixed routes (or lines).

The report by Vostok New Ventures, notes,”Swvl offers a premium on-demand bus service with third party supply. The algorithm
plans the most efficient routes and the most efficient bus stops for peak hours, and more flexibility is possible during off peak hours. Network effects arise through the snowball of the more users that are attracted to the service, the more bus owners will want to offer their supply, the more bus supply the more routes etc., the more customers etc.”

It won’t be a fair comparison but to give you some context, Careem had raised its $60 million round (Series C) at a valuation less than $200 million in November 2015, over three and half years after the company was founded. Swvl is now in the same territory both in terms of total investment they’ve raised so far and the valuation, in almost two years.

The VC landscape in MENA is entirely different today with a lot more options when it comes to raising Series A/+ rounds so the funding is relatively easier to come by (than it was when Careem raised money) but what Swvl has achieved is still a very big feat.

The report also notes that Swvl that recently expanded to Pakistan after Launching in Kenya earlier this year is eyeing $1 billion GMV (Gross Merchandise Value) by 2023 and has plans to expand to Karachi, Lagos, and Johannesburg, “We believe the overall target of USD 1 bln in GMV by 2023 is achievable and that Egypt alone could become worth at least USD 500 mln and, if successful in Lahore, Karachi, Nairobi, Lagos and Johannesburg, this upside obviously multiplies”

Vostok also said that they’ve studied this opportunity for years but only invested now as Swvl has proven that there is real demand and that the economics work, “The overall total addressable market in emerging markets is estimated at some USD 150 bln. Looking at Swvl’s cohorts and bus lines in Cairo where bus utilization is 60%+ you see a clear path to gross margins close to 30% over time, higher than taxi-hailing at roughly 20%, likely warranting also higher multiples for this type of business.”

The report by Vostok also include some very high praises for Mostafa Kandil, the CEO of Swvl.

“The entrepreneur here is of very high quality. Previously at Rocket and Careem, Mostafa Kandil has built a team that executes well and at high speed. In fact, I believe that Mostafa may be the first Arab tech entrepreneur that builds a global product. All the other successes coming out of the Arab world have been either built by foreigners and/or have been solely focused on the local region,” said the report.

“Swvl’s ambitions are first pan-African but also to quickly take the product to South East Asia. Its latest international city, Nairobi, has
grown to the same size that Cairo achieved after 10 months in merely six weeks,” it added.

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Entrepreneurs

Saudi Arabia: Supercharging Startup Opportunities

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As the Kingdom amps up its business-friendly credentials and welcomes a new wave of entrepreneurs, Kais Al Essa, Founding Partner and CEO of venture capital firm Vision Ventures, talks opportunity and accessibility

Supercharging opportunities for foreign startups is a high-profile focus for Saudi Arabia. While our nearest neighbours have historically been the go-to hubs, in future a much higher percentage of entrepreneurs are expected to venture into the Kingdom.

To read more click https://magnitt.com/news/51091/saudi-arabia-supercharging-startup-opportunities

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StartUps

Programme to foster cooperation between startups, corporates in Dubai

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Dubai Startup Hub, an initiative of Dubai Chamber of Commerce and Industry, has unveiled its revamped Market Access programme which pairs leading companies in the UAE with startups that offer innovative solutions addressing their key challenges.

Details of the new Market Access features were announced at a launch ceremony in Dubai and was attended by members of the business community, including previous corporate and startup participants who shared their experiences and success stories. Among the additional benefits provided to companies participating in the programme are: one-year membership, specialised workshops and access to a wider network of solutions, in addition to the ability to list multiple challenges on the Market Access interactive and smart online portal where they can also communicate and collaborate with startups. Startups that are selected to participate in the programme can benefit from training and pitching workshops, access to lucrative business opportunities, as well as a platform to boost their market exposure and build their brand reputation.

To read more click https://magnitt.com/news/51105/programme-to-foster-cooperation-between-startups-corporates-in-dubai

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Innovation

Misk Innovation & 500 Startups Reveal Joining Accelerator Program

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The Misk 500 Accelerator program – a collaboration between early-stage venture fund and seed accelerator 500 Startups and Misk Innovation, the Saudi non-profit foundation devoted to developing Saudi youths – have recently revealed the 20 participating companies in the program’s second cohort.

Currently underway in Riyadh, the program’s ‘Batch 2’ comprises a diverse group of startups that span the MENA region, including Saudi Arabia, Egypt, United Arab Emirates, Bahrain, and Jordan. Those startups are building technologies and products that impact B2B, B2C, E-Commerce, FinTech, EdTech, HealthTech, IoT, robotics, artificial intelligence, SaaS, and messaging services.

To read more click https://www.arabnet.me/english/editorials/entrepreneurship/startups/misk-innovation–500-startups-reveal-second-batch-of-20-startups-joining-misk-500-accelerator-program

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AgroFood tech

A Lebanese Student Came Up with the Solution to the Apple Crisis in Lebanon

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A Lebanese Student Came Up with the Solution to the Apple Crisis in Lebanon featured image

source https://www.the961.com/listicles/4-questions-you-should-expect-when-you-visit-your-lebanese-village

Wissam Hachem · 

Have you ever thought about preventing the oxidation of fruits by extending their shelf life? Biology student Richardos Lebbos found a solution for the apples’ problem in Lebanon, seeing the extent of the damage done to the apple produce in 2017, where tons of Lebanese apples were thrown on the ground after being banned in several countries.

“I remember hearing about the crisis of apples being thrown because of the high price of cold storage and other problems. I was in a taxi at the time, and I had an idea to do something that would preserve the shelf life of the apples,” Lebbos told Berytech, a dynamic environment for Lebanese startups, fostering innovation, technology and entrepreneurship.

Via Food-heritage

It all began in the university lab in USEK, which Lebbos had full access to as an employed student. He started working on creating a starch-based liquid that acts as a bio-coating for fruits and vegetables and extends their shelf life. Starch, in scientific literature, is known to be a natural polymer that is used in many industries.

What Lebbos wanted to do was create a liquid that could turn starch into an invisible layer that is transparent on fruits, and that would consequently act as a barrier to oxygen and bacteria, and hence a barrier to the oxidation of fruits.

Via Berytech

“Fruits that are not exposed to oxygen, and therefore do not have oxidation taking place, have more than twice the shelf life without cold storage,” Lebbos explained. 

The liquid was invented for businesses such as big farmers and retailers that import and export fruits. These retailers usually have a wax line where they polish the fruit with a chemical to make it shiny. “I plan to replace this chemical with the Startchy liquid” said Lebbos. “Once you spray the fruit with the liquid and dry it, it will be ready for shipping without cold storage.”

Via Startchy

While working at the lab, Lebbos met pharmacologist Kayssar Eid and agricultural engineer Tony Barcha, both USEK students. They came together on that one vision and aim and founded Startchy.

With the support of Berytech, Startchy was registered in the US, which allowed the team to test their product with Stemilt, the biggest exporter of apples in the US and one of the biggest in the world.

Via Agrytech Program

“We did a test with Stemilt on their apples, where we coated them with our Startchy liquid, and it worked! We saw an extent of the shelf life twice and more. They gave us a letter of intent, and now we are working together,” boasts Lebbos and for a good reason.

And that wasn’t all. The creation of this product has come to be of benefits to other countries as well.

Via Doehler

Döhler, the German producer of technology-based natural ingredients, invested in Startchy a total of $600,000. Maersk, the Danish growth (incubation) program for international startups worldwide selected Startchy among 30 other shortlisted global startups.

Via FreightWaves

After 30 grueling days with Maersk in Copenhagen, Startchy was selected along with one other startup for a cash investment of $500,000!

The Startchy team is now finalizing the industrialization of their product by partnering with Dohler, and they’re working on getting the certification to enter different markets, beginning with the US market.

Via abedhassoun

In addition, Lebbos and his two partners have started this month (September) running pilot trials with big suppliers and customers. “Hopefully, we will hit the market soon, beginning of 2020,” commented Lebbos. 

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Entrepreneurship

WEEK IN REVIEW : MENA startups under scrutiny – WeWork’s IPOs failure: $3 billion in cash needed to get through 2019 despite $12 billion in investments!!!

WeWork needed $3 billion in cash to get through 2019. Despite $12 billion in investments, i

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Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy news pertaining to startups and venture capital.

Three main headlines last week but my favourite is still the completion of Amazon mega merger with SOUQ.com – In a press release it says it has completed its acquisition of e-commerce firm Souq.com, which was first announced at the end of March and sees the U.S. retail giant enter the Middle Eastern market.

Amazon paid $580 million in cash for Souq, according to filings. Bloomberg previously reported that Amazon was in discussions over an investment at a valuation in excess of $1 billion but, amid rivalry from Emaar’s ambitious Noon.com project and others, an acquisition agreement was reached. The two companies said today that they have completed an initial integration that allows customers to log into Souq.com  using their Amazon account credentials.

Next is our headline on Middle East StartUps and Silicon Valley Guru look for common synergies http://www.startups.news/?p=7761

In 2018, a record number of investments – 366 of them – were made in the Middle East and North Africa region, Magnitt 2018 MENA Venture Investment Report found. More widely, it detailed that more than 155 institutions invested in the region’s startups in 2018, 30% of which were from outside the region.

These developments, coupled with efforts seen in the past year – such as the establishment of Egypt’s first venture-capital fund focused on investing in fintech, the $100m for startups in the Bahrain-based Al Waha Fund of Funds, and Tunisia’s startup act – are giving the region’s startup scene unprecedented momentum. With record levels of investment, interest from tech watchers and interesting new ventures launching all the time, the region’s startup scene looks like it’s going to get even hotter.

The region itself covers a total of some 50 million consumers across several countries, as well as a relatively untapped market: only about two percent of all retail spend today is made online, according to a report from McKinsey.

Lastly we look at we work our story http://www.startups.news/?p=7770 focuses on the downturn of the company following the failure of its IPO.

As of the most recent funding round’s valuation, WeWork would be the second-largest IPO of 2019, trailing only Uber.

WeWork has copied an old business model, slapped some tech lingo on it, and suckered venture capital investors into valuing the firm at more than 10x its nearest competitor.

The company also burns tons of cash, carries huge risk factors in a recession, and sports some of the worst corporate governance practices we’ve ever seen. WeWork – now rebranded as The We Company (WE) – filed its initial S-1 on Aug. 14, and the company reportedly plans to go public in September. We don’t have official pricing information,Continue with Free Trial

WeWork’s eccentric CEO/founder Adam Neumann stepped down this week amid pressure from board members (SoftBank) to exit the C-suite. Wall Street doesn’t think Neumann is fit to be CEO of a public company and if you don’t know why, read this WSJ piece.

Kate Clark@KateClarkTweets

What’s next for Peloton? International growth? Doubling down on original content? New hardware? Tell me what to write.1069:13 PM – Sep 26, 2019Twitter Ads info and privacy62 people are talking about this

I particularly like an opinion piece on Wework by Japan times https://www.japantimes.co.jp/opinion/2019/09/30/editorials/wework-ipo-didnt-work/#.XZHptuJMRPY

nitially, investors were intrigued. Softbank’s Masayoshi Son provided more than $10 billion in funds, calling WeWork “his next Alibaba” — a reference to a $20 million investment that paid back $50 billion when it went public. As WeWork began preparations to go public, initial valuations reached $47 billion.

The prospectus for that offering was eye-opening and deflating. The company was a huge landlord, but that created sobering operating expenses — $50 billion in lease commitments — and no guarantee of revenue from armies of freelancers that could not afford long-term commitments of their own. The figures were not reassuring: WeWork’s revenue increased to $1.8 billion in 2018, but the company lost $1.6 billion that year. According to projections, WeWork needed $3 billion in cash to get through 2019. Despite $12 billion in investments, it had never reported a profit.

In addition to financial issues, there was the problem of Neumann himself. The prospectus noted that he ensured his continued control of the company through a special class of shares and the power to fire the board of directors; he had used some of his WeWork stock to secure a $500 million personal loan; he owned four buildings that WeWork was paying him to lease; and he was paid nearly $6 million for the trademark “We,” which the company had recently adopted. (Those funds were returned after the resulting uproar). In addition, there were tales of adolescent behavior that raised questions about his judgment. Hanging over it all, however, was a board that did not rein him in.

The furor that greeted the prospectus prompted the shelving of the IPO, the slowing of expansion plans, the prospect of layoffs of as much as one-third of the company’s workforce and Neumann’s decision to step down and his replacement by two co-CEOs.

The WeWork failure is not unique. It follows similarly lackluster IPOs by ride-sharing companies Uber and Lyft, and that of Peloton, the stationary bicycle manufacturer that considers itself a technology platform as well. Neumann is another “bad-boy founder” like Travis Kalanick, who was forced to step down as head of Uber after reports surfaced of his abusive behavior. Yet for all the flaws in WeWork’s ambitions, the system worked. Public scrutiny laid bare the gap between WeWork’s aims and its reality. WeWork is, despite the hype, a real estate arbitrage, and should be valued accordingly.

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Apps

Egypt’s Homemade Food Market Mumm Launches Meal Subscription Service For Companies

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Egyptian food-tech startup Mumm has just added a meal subscription service called Mumm Office Club in Cairo to their line of services. Mumm’s kitchen-to-delivery online marketplace has been offering homemade food cooked by partners to users for over three years, but the Mumm Office Club sources a large variety of meals and different cuisines from central kitchens throughout Cairo specifically catered to companies.

Within their operations, Mumm partners with companies from a variety of sizes to offer ‘nutritious meals’ at a discounted rate to its employees, where both companies and employees can save up on costs and receive food on a daily or monthly basis. Once the company partners up with Mumm, their employees are allowed to subscribe to receive food on working day, pick the meals they receive daily or monthly, and have a free deducted from the employee’s salary or pay directly upon receiving.

After piloting last month with several companies varying in sizes, Mumm’s CEO Waleed Abdelrahman watched fellow business owners realise the difference ‘Mumm Office Club’ has made on the overall productivity of their employees in only a few weeks. “Across the board, the employers witnessed a general decrease in wasted office hours and the spread of a positive outlook on company culture,” says Waleed Abdelrahman, CEO and founder of Mumm.

Mumm Office Club is a comprehensive food programme offering over 15,000 unique dishes from a variety of international and Middle Eastern cuisines, giving employees full control over their daily orders by allowing them to set their own dietary restrictions and get information on the nutritional value of each meal. Since its official launch this month, Mumm’s new service managed to gather over 700 paying subscribers at 10 companies and startups ranging in size, including Swvl, Robusta, Harmonica, BasharSoft, and Bel using the subscription service.

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eCommerce

Golden Scent First Startup to obtain SAGIA Trading License

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Leading beauty e-commerce platform celebrates a remarkable achievement in 2019 with a huge boost to its regional position

Following its four years of continued success, Golden Scent, the leading Saudi Beauty  E-commerce Platform, announced that it has been granted the first commercial license by the Saudi Arabian General Investment Authority (SAGIA), without the minimum capital requirement.

The company’s excellent reputation, class A investors and customer loyalty all combined to ensure the company could be exempted from the SAGIA’s Minimum Accepted Capital requirement.

The news, which was announced during the 7th Arabnet Riyadh Conference, marks a great achievement in 2019. As Golden Scent has expanded to new GCC markets, by entering the UAE and Kuwait, and exceeding over 3 million app downloads. The E-commerce platform increased its product portfolio by 250%, added new logistics warehouses, and continued to grow its manpower – both quantitatively and qualitatively.

Supporting start-ups has always been a key element for SAGIA’s mission, attracting and retaining investors and establishing Saudi Arabia as a world-class investment destination. As a result, Golden Scent has been granted the commercial license as it represents a perfect example of how Saudi entrepreneurs, supported by foreign capital, can make a significant contribution to developing a sustainable, diversified national economy – a key objective of Saudi Vision 2030.

Founded in 2000, SAGIA is the foreign investment license provider for the Kingdom. Alongside its legislative role, SAGIA works with government entities to create, develop and market business opportunities; offering specialized consultations to companies in different sectors. Through its five business centres, SAGIA provides most of the government services by facilitating the necessary steps for clients to start and maintain business.

Golden Scent is rapidly growing stronger since its launch in 2014 and continues to address and anticipates its clientele needs with special offers and discounts, with more surprises and additions in the pipeline to make 2019 yet another unforgettable year for the platform and its ever-growing client base. As Malik Al Shehab, Co-Founder and CEO of Golden Sent said: “We are very proud of the achievements we have accomplished till now, and receiving the commercial license from SAGIA. And we would like to thank all the supportive parties involved in Golden Scent’s journey in becoming a leading platform and a trusted brand in the Middle East market.”

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Entrepreneurs

Egyptian B2B e-Commerce Marketplace, MaxAB Closes Landmark $6.2 Million Seed Round

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MaxAB, an Egyptian B2B e-commerce marketplace that connects informal food and grocery retailers with suppliers via an easy-to-use app, has secured seed funding of $6.2 million, one of the largest ever seed rounds raised by a MENA start-up. The round was co-led by Beco Capital, 4DX Ventures, and Endure Capital, with participation from 500 Startups, Outlierz Ventures and other local investors. With this injection of capital, the company expects to reach 50 percent of Egypt’s population within the next two years before expanding across different markets.

Led by Egyptian and Libyan entrepreneurs Belal El-Megharbel (previously at Careem) and Mohamed Ben Halim (Previously at Aramex), the 270-strong MaxAB team has built a stock list of over 600 products [including groceries, beverages, dairy, confectionery and non-food products]. Using technology to close the gap between traditional retailers [over 400,000 in Egypt] and FMCGs, the Cairo based start-up leverages technology to connect brands to retailers via its Android app. It is working to automate and simplify Egypt’s $45bn FMCG food retail market and has recorded 50 percent month-on-month growth, with 9,000 activated retailers on the platform already.

Brands using MaxAB have access to real-time demand monitoring and business intelligence tools, which improve end-to-end supply chain control, and better forecasting. Retailers in remote and under-served areas will have access to a wide variety of products, the convenience of ordering stock online in addition to second day deliveries not to mention the added benefit of access to credit facilities.

Belal El-Megharbel, Co-Founder and CEO at MaxAB, says: “Nobody has addressed the underserved retailers before; retailers are faced with a limited assortment of products, the hassle of dealing with multiple wholesalers and restricted access to credit facilities. At the other end of the supply chain, the FMCGs have limited visibility on market trends, demand patterns and retailers’ business needs – leading to losing potential revenue opportunities.

“We are using data and analytics to understand purchasing and retail behaviours, as well as make the end-to-end process of brands seamless and convenient. This will enable FMCGs to make informed decisions about their purchasing, which will ultimately have a positive effect on their bottom line and catalyze one of the biggest markets in Egypt. This investment round will allow us to accelerate our growth plans and develop new products and services throughout North Africa using the first of its kind B2B ecommerce platform”.

Yousef Hammad, Managing Partner at Beco Capital, says: “This is Sparta” was the first impression I got when I met this team of warriors, battling one of the biggest inefficiencies on the country’s balance sheets. By leveraging technology, MaxAB is redefining the grocery supply chain in Egypt to fit the requirements of the micro retailers who make up 90% of the grocery market. The metrics they have recorded in such a short period are impressive, and we expect to continue to see double-digit growth as they scale.”

Peter Orth, co-founder and Managing Partner at 4DX Ventures, says: “We’ve been consistently impressed with how Belal and the rest of the team have executed, and achieved significant traction in a very short period of time. We believe that their B2B e-commerce model is the right way to serve this significant market, and we’re really excited to partner with the team to drive the next phase of growth.”

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Ecosystem of the MENA

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