UAE’s online gift shop Joi Gifts has raised $2.5 million from regional investors in an early-stage funding round, led by Dubai-based venture capital firm Knuru Capital, as it pursues further expansion in the Middle East.
The Series A funding round for the start-up also included Dubai-based investor Mena Moonshots and Saudi Aramco's entrepreneurship arm Wa’ed, Joi Gifts said on Sunday.
"Knuru understands online marketplaces, and its experience in helping them scale will be invaluable for Joi’s next stage of growth," Rami Kahale, chief executive of Joi Gifts, said.
"We are also very excited about the participation of Wa’ed Ventures and Mena Moonshots providing a significant strategic advantage in Saudi Arabia and the UAE, respectively.”
The Middle East and North Africa's gifting industry is worth about $28 billion, growing more than 30 per cent annually, according to Enhance Ventures, a venture capital studio, which builds online marketplaces that fill gaps in markets across Mena, Pakistan and Turkey. Joi Gifts is a part of Enhance Ventures' portfolio of companies.
"With Joi’s first independent round of funding, Enhance has successfully spun off Joi and validated the opportunity for venture building under a studio set-up in the region," Mohammad AlHokail, partner at Enhance Ventures, said.
"With its highly capital-efficient structure based on sharing and collaboration, venture studios represent a new asset class that can offer higher returns in shorter time frames.”
Joi Gifts will use the money to fuel short-term growth through marketing campaigns, attracting more customers, product development and further regional expansion, Mr Kahale said.
Established in 2016, Joi Gifts operates in eight countries, namely the UAE, Saudi Arabia, Bahrain, Qatar, Oman, Jordan, Lebanon and Egypt. As part of its offering, Joi Gifts uses augmented reality and features formally dressed “concierges” to deliver gifts and, if the sender wishes, sing a relevant song for each occasion.
The start-up recorded operating profitability and a five-fold increase in sales in 2021, it said without providing specific figures. Countries such as Saudi Arabia and the UAE have the highest average spend on gifts globally, according to Enhance Ventures.
“Joi Gifts has managed to build a business with very favourable unit economics and scaled it regionally with just a seed round of funding. This is the hallmark of a strong team,” Victor Sunyer, partner at Knuru Capital, said.
The gifts industry is "extremely well-suited" to the Saudi Arabian market, according to Fahad Alidi, the managing director of Aramco's Wa’ed. "We see significant potential for Joi Gifts in the kingdom," he said.
"With the platform’s strong offering and focus on customer experience, we believe the Joi team is well-positioned here.”
The total funding secured by start-ups in the Mena region rose by 64 per cent in the first half of the year to $1.2bn, according to a report from data platform Magnitt. The UAE led the way in deal numbers, with its start-ups securing 61 per cent of all Mena investments, the report found.