Saudi Arabia's operational procurement start-up Lawazem raised $1.3 million in its seed-funding round, which will be used by the company to boost its technology and add more products to its portfolio.
Operational procurement refers to the collection of products and services needed to sustain a company’s day-to-day business operations.
The new round was led by Merak Capital, a technology investment group licensed by the Capital Market Authority of Saudi Arabia and also included participation from Saudi Arabian venture capital company Merced.
Founded in 2020, Lawazem is a business-to-business company offering a broad range of services and products ranging from VIP guest services to office stationery, “decreasing the time, effort and costs of reactive operational procurement”, the company said.
This new investment will help the start-up “expand its staff, marketing initiatives and technology capabilities”, it said.
The global procurement market is booming and is expected to reach $9 billion by 2025 from $4.9bn in 2018, India-based Market Research Future said.
There are many factors propelling its growth, including rising demand among enterprises to cut down the cost related to procurement operations, increasing competition among enterprises, adoption of analytical solutions and introduction of new technologies such as artificial intelligence and machine learning, the market analysis company said in its latest report.
The process of operational procurement is "typically expensive and time consuming”, said Abdulhakim Albeshir, co-founder and chief executive of Lawazem.
"This investment round … will be pivotal for us as we move to further develop and enhance our technology, as well as help in establishing the needed infrastructure to address the ever-growing demand for our products and services,” he said.
The company witnessed an average quarterly growth of 150 per cent last year with more than 100 public and private organisations currently using Lawazem.
It aims to become the "leading platform" for all operational procurement needs in the kingdom and the wider region.
Operational procurement continues to be largely handled manually, with little to no technology infrastructure, said Ahmed Al Jabreen, partner at Merak Capital.
“Lawazem is poised to be the technology-enabled disrupter for this vertical," he said.