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FlapKap Provides Revenue-Based Financing to Ecommerce Brands in MENA, Secures $3.6M in Seed Funding • TechCrunch

Recent research suggests that the e-commerce market in Saudi Arabia, the United Arab Emirates and Egypt is worth a total of $21.4 billion and is expected to grow by more than 50% to reach $33.3 billion over the next few years. next three years. And as MENA shoppers increase their shopping spend, it becomes increasingly imperative for online stores to position themselves to take full advantage of this growing phenomenon.

FlapKap, using its revenue-based financing (RBF) platform, helps these stores solve the growth-killing challenges emerging online stores face when trying to meet customer demands. The company, which enables e-commerce businesses to grow and grow by targeting companies with limited access to bank or risk financing, announces that it has raised $3.6 million in seed funding to boost His efforts.

Ahmad Coucha and Khaled Nassef founded FlapKap in 2022; Sherif Bichara and Adel Hodroj are part of the founding team. It was during Coucha’s time at Kijamii, a young digital agency he launched in 2014 that has led projects for Fortune 500 companies, that the CEO noticed late payment and access issues. working capital that businesses, including his own, were faced with. For example, most Kijamii customers were always paying late, sometimes 30-120 days after a sale was closed.

“We always thought it should be the exact opposite. Big clients with huge sums of money shouldn’t be the ones who get extremely flexible payment terms from agencies; it should be the small and medium businesses struggling for money and growth. Those should get the support,” CEO Coucha told TechCrunch.

In 2021, Coucha spent some time in the United States and witnessed the rise of revenue-based finance platforms in the country and in the West, including Clearco and Wayflyer. The idea of ​​replicating a similar operation for the MENA region arose, hence the launch of FlapKap. The company primarily serves SaaS and e-commerce platforms like most revenue-based finance companies, but has more of a customer base on the former than the latter.

E-commerce operations have flexible payment terms that suit FlapKap’s business because they spend a lot on advertising, marketing, and inventory, recurring activities responsible for late payments or borrowing from these brands to stay operational. “SaaS is still growing in its early stages in the Middle East, but it’s not big enough yet. On the other hand, e-commerce is booming in all regions of the world and is underserved by the current financial infrastructure in the Middle East and Africa,” he added on his company’s preference for e-commerce brands in both regions.

FlapKap’s business model is one where it funds the expenses of e-commerce platforms and gets its money back when those brands refund a percentage of their revenue until the refund is complete. In other words, FlapKap adds a flat fee — split to be paid as a percentage of their revenue within a specific time frame — to any amount its customers access on its platform.

The revenue-based finance company for e-commerce platforms, which claims to see 300% quarter-on-quarter growth, also mentioned that it has partnered with dozens of Egyptian customers and Emiratis in six months. Some include Dresscode, Raw African, Palma and Tam’s Shoemaker. FlapKap claims to have helped generate over 85% increase in revenue and over 70% increase in net profit for these customers within months.

FlapKap also recently integrated its AI-powered insights and financial data analytics with Shopify, WooCommerce, Facebook and Google, and expects to form more partnerships, it said in a statement. “In addition to the financing solutions we offer our partners, we also offer them other value-added services to help them go further. So we always like to position ourselves as a growth partner; we don’t just fund,” the chief executive said. “We want to drive growth for them. We have a work-in-progress model built to identify customer growth potential; it is a model that we are currently building and that we are enriching thanks to the data that we collect.

This latest capital injection comes six months after FlapKap’s pre-seed lifting and the investors on board are strategic for FlapKap. QED, for example, has invested in some of FlapKap’s global counterparts, such as Wayflyer and Fairplay. The fintech-focused venture capital firm used Bolt, its Middle East investment arm, to close the deal. There is also Nclude, backed by the Egyptian government, A15 and Outliers, a renowned start-up investor from the MENA region. “I’m excited to build FlapKap with them,” Coucha said. “I think they’re not just investors; they are true partners in what they are doing for us now and what they are meant to be doing in the future as well,” Coucha said.

With this new funding, FlapKap expects to increase its ability to help more e-commerce businesses in the MENA region scale and maximize their growth potential, as well as cement its position as the premier e-commerce based funding player. the income of the region. The company aims to consolidate its presence in Saudi Arabia, the United Arab Emirates and Egypt by offering e-commerce businesses the ability to scale their digital inventory and ads now, while paying later flexibly. Gbenga Ajayi, QED Partner, commented on the investment: “Having invested and worked with companies similar to FlapKap in other regions such as Europe and Latin America, we are confident that this team can achieve success. similar.”