Saudi-based e-commerce platform raises $36m in funding

The e-commerce platform Retailo has raised $36m to help fund its effort to digitise mom-and-pop stores in Pakistan, the UAE and its home country of Saudi Arabia.

The Riyadh-based company’s Series A round was led by Silicon Valley’s Graphene Ventures, an early-stage investor in Snap and Lyft. The funding round is among the ten largest over the past year in the three countries Retailo operates in, according to data by Crunchbase. It raised $29m in equity and $7m in debt.

A string of startups has sprung up in recent years targeting the region’s retail shops, which often run with manual cash registers and handwritten entries. It’s a $500bn industry made up of more than 10 million small businesses in the Middle East, North Africa and Pakistan, according to Retailo.

Tiger Global Management made its first investment in Pakistan two months ago in CreditBook, a firm that offers digital book-keeping solutions to small businesses.

Retailo is looking to digitise these stores by giving them a one-stop portal to order all their products at better margins, instead of making multiple calls and visits to wholesale markets. That strategy has become more attractive amid the surge in global commodity prices.

“As global supply chains come under stress pushing up commodity prices and depressing GDP growth, the value of smart supply chains becomes even more important,” said Talha Ansari, chief executive officer at Retailo.

It is also offering credit lines and flexible payment options through buy-now-pay-later services that will be scaled up by the debt funds raised. Leveraging its regional presence, Retailo has recently begun offering its sellers a cross-border distribution platform across its market. The funding will help Retailo move into the next phase of expansion in new geographies, said Ansari.

“We are building something which is much more scalable faster,” he said in an interview. The company expects revenue to grow by six times this year, Ansari added.

Investors in the round include 500 Global, Agility Ventures, Aujan Group, Tech Invest Com and Mentor’s Fund, all of whom have exposure in the retail industry’s technology companies. The debt was raised from Nahda Fund – one of the Middle East’s first venture debt funds, backed by Hong Kong-based IMM Investment Global.

Shorooq Partners, Abercross Holdings, Arzan Venture Capital, AgFunder also participated in the round as repeat investors.