El-dokan, an Egypt-based developer of e-commerce software, raised $550,000 in a pre-seed funding round as it seeks to expand in the highly-competitive online market.
The investment was led by regional investors, including Egypt's Flat6Labs, EFG EV — a joint venture between investment firm EFG Hermes and Egypt Ventures, Saudi Arabia's Hala Ventures and California-based 500 Global, el-dokan said on Monday.
The funding will be used to improve and develop el-dokan's e-commerce services, which are based on headless technology, a company representative told The National.
Headless technology is a technique in which the front end of a platform — or that which users interact with — can be customised and made flexible to adapt to user preference without disrupting the back end or the rest of the system.
The funding will also be used by the start-up to expand regionally and internationally.
"We already succeeded in establishing a legal entity in Saudi Arabia to expand our sales and marketing activities across the GCC. This expansion should be followed by the South Africa market, after building a strong footprint in the Mena region," the company representative said.
The company's technology helps retailers "drive sales growth while simultaneously bringing down maintenance costs", helping them to achieve "the highest levels of operational efficiency", said Mohamed Yousry, chief technology officer and co-founder of el-dokan.
"The majority of retailers have repeatedly shown the willingness to ... replace the traditional e-commerce methods with more advanced and flexible technology."
E-commerce grew exponentially during the Covid-19 pandemic and that growth has continued as consumers tap into its convenience and the variety it has on offer.
Egypt was ranked the 39th largest market for e-commerce in 2021, with revenue of $5.2 billion, according to data platform ecommerceDB.
The sector is expected to yield an annual growth rate of 22 per cent through 2025, and is projected to outperform the global average of 6 per cent, the report said.
Egypt's start-up ecosystem also continues to grow. Venture capital funding in the country more than doubled to $307 million in the first half of 2022 from a year earlier, ranking it third in the Mena region, start-up data platform Magnitt said in a recent report.
The number of deals reached in the country also grew by 22 per cent annually to 78 during the first six months of the year.
El-dokan, which was founded in 2020, primarily focuses on large retailers and chain stores. The start-up's tools are intended to increase market share, drive sales and automate operations, it said.
The start-up counts consumer goods major Procter & Gamble and Saudi Arabian telecoms company Mobily among its clients.
Its customers have so far been able to achieve a gross merchandise value of $45m on the back of its headless technology, el-dokan said.
"We are now serving a global roster of clients. This is a testament to the ability of regionally-based tech start-ups to develop leading-edge technologies trusted by large, international brands, and compete with global counterparts," Mr Yousry said.