The founders of Brimore, a Cairo-based social e-commerce platform connecting suppliers to community sellers, say they entered the market to solve one problem: why emerging brands were unable to succeed in Egypt despite millions of price-sensitive customers ready for a good deal.
One reason is marketing and second distribution, both require a lot of money.
“More than 95 per cent of our brands are unknown, so our promise to suppliers is to create and generate the demand,” says Brimore chief executive Mohamed Abdulaziz.
“We connect emerging brand owners with a network of micro sellers on social media, so they can sell and refer the products in their surrounding circles, ensuring smooth market access for the supplier and dynamic income opportunities for the sellers.”
Brimore – which merges the words "bring" and "more" – capitalises on the region’s e-commerce boom. The sector surged 52 per cent to reach $22 billion by the end of 2020, 80 per cent of which came from Egypt, Saudi Arabia and the UAE, according to a study from Wamda and MIT.
Mr Abdulaziz and chief business officer Ahmed Sheikha, who had been classmates and friends at Alexandria University, worked in end-to-end distribution and product management for various companies before founding Brimore in 2017.
The start-up began with five employees and has since grown to around 700. It now has a network of 75,000 active sellers and 300 suppliers, offering more than 8,000 products in categories that include household goods, personal care, fashion, electronics, furniture and food and beverages.
Brimore raised $3.5 million in a pre-series A round in May 2020, after raising $800,000 in a seed round in April 2019 and is soon planning to announce its series A round – its largest by far.
The seed round was co-led by Algebra Ventures and Endure Capital with participation from 500 Startups, Flat6Labs and angel investors.
The pre-series A Round was also led by Algebra Ventures with the participation of DisrupTech, Vision Ventures and existing investors 500 Startups and Flat6Labs.
“We came in very early and we continue to support Brimore throughout their journey,” says Tarek Assaad, managing partner at Algebra Ventures.
By working with small- and medium-sized Egyptian factories and buying a large portion of their capacity, Brimore “changes very significantly the economics of these brands”, he says.
The platform then helps move these products to a network of sellers that is 92 per cent women, with more than 70 per cent of business coming from rural areas outside Cairo and Alexandria.
“The end consumer, who is typically very price-sensitive and not very brand-sensitive has access to a product that’s a good fit for them. And the seller is able to create a small business in a socially acceptable manner, with tremendous upside potential,” Mr Assaad says. “It plays to the natural social fabric of Egypt.”
Algebra Ventures and new investors, including Fawry, Flourish Ventures and the International Finance Corporation (IFC), have joined in the third round.
Egyptian FinTech Fawry acquired a minority stake in Brimore at a value of 15.7m Egyptian pounds ($1m) in September.
The acquisition allows Fawry to introduce its network of 230,000 merchants to Brimore’s distribution platform, while Brimore clients will be able to access Fawry’s digital payments and financial services.
“Fawry’s investment in Brimore fully aligns with our strategic objectives of expanding Fawry’s digital ecosystem and establishing a foothold in Egypt’s booming e-commerce scene,” Fawry chief executive Ashraf Sabry said at the time.
The IFC disclosed in August that it was considering an equity investment of $5m in Brimore, primarily to expand the company’s operations.
The latest funding will be “mainly directed towards building our infrastructure, our operational excellence and expansion in the country”, says Mr Sheikha.
Brimore already calls itself “the biggest social e-commerce app in Africa” by number of users and revenue, which the founders declined to share publicly.
“When we started this business, the momentum of social commerce worldwide wasn’t like now,” says Mr Abdulaziz. “For Africa, we are pioneers in this.”
He points to success stories elsewhere, such as Meesho in India, which was founded in 2015. It enables small businesses and individuals to start their online stores through social channels such as WhatsApp, Facebook and Instagram.
Meesho has raised a total of $1.1 billion in funding, including an equity investment from Facebook in 2019. It boasts a network of 17 million resellers, 15 million of whom are women, and over 60,000 suppliers.
In Brimore’s model, the app is a tool for sellers to generate promotional material and share through social media or face-to-face. When they receive orders from consumers, they place the consolidated order, which is then sent to a central warehouse to get fulfilled and delivered to customers’ doorsteps.
“We did not explicitly target only women. But when we started operations, we realised [there was] more traction coming from the women side,” says Mr Sheikha.
Brimore buys inventory at cost and ensures a 25 per cent to 40 per cent profit margin for sellers, who are able to earn 3,000 to 4,000 pounds monthly, on average.
The company has also piloted a microfinancing project, offering credit facilities to sellers while making money from the interest. Mr Sheikha says this is coupled with providing them with financial literacy skills.
“It’s not just about giving them money. It’s about supporting them on how to benefit from this money,” he says.
Brimore also generates capital through its end-to-end fulfillment business Milezmore, which it started about a year ago.
With 18 delivery hubs and 80 delivery vans, the company handles all of the warehouse and fulfillment operations and more than 50 per cent of last-mile delivery.
“We believe that Milezmore will be a completely separate entity that we can raise dedicated funds for,” Mr Sheikha says.
The next step in Brimore’s journey is to start regional expansion in Africa. The company is considering expanding to Kenya and Morocco in 2022, Mr Sheikha says.
“We’re targeting mainly countries in Africa and some parts of the Middle East.”
Q&A: Mohamed Abdulaziz, chief executive and co-founder of Brimore
What successful start-up do you wish you had started?
I love M-Pesa in Kenya and how they’ve solved a real problem with a great product-market fit and relying on social networking in creating M-Pesa agents all over Kenya. Now, it’s more than 98 per cent adoption and one of the main incentives for any commercial business in Kenya.
What new skills have you learnt in the process of launching your start-up?
Two skills: first is resilience. The journey wasn’t easy and we walked a very long road to be here. We’ve faced a lot of challenges in operations, fundraising, hiring, suppliers and so on. In hard times and with every tough decision, being resilient was key to overcome the challenge. The second one is strategic thinking. Building an entire parallel market needs a smart strategy to connect the dots within the full value chain.
How has the pandemic affected your business?
Thankfully, we were on the good side of the pandemic. The pandemic proves that having a trade business doesn't require having a brick-and-mortar store; you can run a business from your home, on WhatsApp or Facebook, or even through phone calls. It helps in increasing the adoption of social e-commerce on both sides, consumer and reseller.
What is your next big dream?
With the population pyramid in Egypt and Africa, I see a huge opportunity in HealthTech (health technology) and I believe in the impact that we can provide in this space. Another dream is to see a group of Brimore alumni building impactful ventures that can drive the growth of the economy and make a real change.
Where do you see the company in the next five years?
With the entire parallel market we are building and focusing on creating real value, I see Brimore as the market gate of Africa.
Date started: 2017
Founders: Mohamed Abdulaziz and Ahmed Sheikha
Based: Cairo, Egypt
Sector: Social e-commerce
Size: 700 employees
Investors: Algebra Ventures, DisrupTech, Endeavor Catalyst, Endure Capital, Fawry, Flat6Labs, Flourish Ventures, International Finance Corporation, 500 Startups, Vision Ventures