The e-commerce market in Saudi Arabia, UAE, and Egypt is so huge and is collectively considered to be worth $21.4 billion. This number is expected to soar to $33.3 billion (50%) within the next three years. This discovery changes the game for online stores especially as they have the opportunity to leverage on the emerging distinctions. Online shops should position themselves quickly as MENA shoppers raise their commerce spending.
Through (RBF), the revenue-based financing platform adopted by FlapKap, the company is helping stores get around the growth destructive complexities that arise as they strive to meet the ever dynamic demands of their customers. FlapKap basic operation involves focusing on businesses which have limited access to bank or venture financing, and helping such businesses to scale up and expand. FlapKap recently secured $3.5 million seed funding to advance its objectives.
FlapKap was founded in 2022 by Ahmad Coucha and Khaled Nassef. These duo were also supported by Adel Hodroj and Sherif Bichara as part of Flapkap’s founding team. FlapKap was born partly out of Coucha’s experience at Kijami which he launched in 2014. While serving as the chief executive of his agency which coordinated projects for fortune 500 companies, Couchie discovered a trend of late payments and difficulty in accessing working capital which businesses faced. Couchie’s clients at Kijami were fond of late payments which usually ran anywhere from 30 to 120 days from when sales closed. This was also the experience of other up starters like Kijami.
According to Coucha; “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”.
Coucha’s time in the U.S. in 2021 exposed him to the rising status of revenue based financing platforms with the likes of Wayflyer and Clearco, and other platforms that arose in the West. This exposure aroused the desire to recreate something similar for MENA and gave birth to FlapKap. FlapKap is primarily for ecommerce and SaaS platforms similar to the common revenue based financing companies. FlapKap however has more SaaS clients than ecommerce clients on its roster.
Ecommerce platforms adopt a flexible payment schedule due to their distinct spending peculiarities that force them to make late payments or even use business loans to subsist, and this approach suits FlapKap all too well. While SaaS is still emerging in the Middle East and has not fully established a sizable presence, ecommerce has a worldwide acceptance that has blossomed globally. The prevailing finance infrastructure in Africa and the Middle East has however not allowed ecommerce to properly position itself in both regions.
What FlapKap does is finance the expenditures of ecommerce businesses and recoup its expenses from the brands when they deliver a certain percentage of their revenue. This flexible routine continues until full repayment is made. So the basic FlapKap business model involves granting access to funds to clients on its platform then establishing a fixed fee scheduled to be repaid in percentages from company’s revenue within an agreed period.
FlapKap recently announced a 300% quarter to quarter growth and over six months the revenue based financing platform has worked with clients from UAE and Egypt. FlapKap has partnered with the likes of Raw African, Dresscode, Tam’s Shoemaker and Palma. According to the company, under few months of partnership, its partners have been able to scale up to an impressive 70% in net profits and 85% increase in revenue.
FlapKap’s AI projected financial data analytics has been integrated with Google, Facebook, Shopify and WooCommerce in a move that portends to be the first phase of more partnerships. The company is not resting on financial solutions but has plans for more value added services that can help partners grow. This arrangement involves a work in progress model which will use accumulated data to identify the growth potentials of its partners.
The recent $3.6 million secured by FlapKap is barely six months after its last pre-seed adventure and Flapkap’s financiers are strategic partners. Leading the pack is QED which has invested in companies like Fairplay and Wayflyer. Bolt, one of QED’s arms was used to run the Middle East investment. Other FlapKap strategic partners are Nclude which is backed by the Egyptian government and popular MENA early stage investor A15 and Outliers.
FlapKap will now focus on increasing its support for ecommerce businesses that fall in the MENA region and helping such businesses maximize their potentials. The secured funds will also help FlapKap fully reinforce its status as the top revenue based financier in the region. FlapKap is getting positioned to be fully established in Saudi Arabia, UAE and Egypt through the incentives it is offering ecommerce businesses. This incentive will immediately allow ecommerce businesses improve their inventory and digital ad campaign on a flexible payment protocol.
Speaking for one of the partners, Gbenga Ajayi, representing QED expressed optimism about the the company’s expectations for FlapKap. Apparently QED already partnered with companies similar to FlapKap. According to Ajayi: “we are confident this team can attain similar success.”
As originally reported in (https://techcrunch.com/2022/10/12/flapkap-provides-revenue-based-financing-to-e-commerce-brands-in-mena-gets-3-6m-seed-funding/)