Dubai start-up iMile to open regional research centre as it raises $10m

The company is also looking to roll-out services to Egypt, Kuwait and Morocco in Mena expansion push

Dubai, United Arab Emirates - Reporter: Alkesh Sharma: Rita Huang, founder and CEO of start-up iMile. Thursday, February 27th, 2020. DIP, Dubai. Chris Whiteoak / The National
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iMile, a Dubai-based last mile delivery company, plans to open a new research and development centre in the region and expand its services across the Middle East after raising $10 million (Dh36.7m) in pre-Series A funding, the company’s founder said.

The funding round was led by a China-based venture capital firm that specialises in the logistics industry and will help the start-up roll-out its services to Egypt, Kuwait and Morocco in its push for regional expansion, Rita Huang, told The National. She did not name the Chinese backer of the firm.

"Improving iMile's tech prowess, customer experience and hiring new talent are our top priorities in the coming months," Ms Huang, who is also the chief executive of iMile, told The National. "Some analysts say that logistics is out-of-fashion now… [but] as a next generation company, we see massive potential."

iMile's delivery operations, which also include a cash-on-delivery option, span the two biggest Arab economies - Saudi Arabia and the UAE. It currently operates two R&D centres in Shenzhen and Hangzhou in China and plans to open a third in the region - either in the UAE or Saudi Arabia - in the coming months.

“Our aim is to develop local solutions and technology to address regional needs. An indigenous R&D centre would also promote knowledge and capacity building in the region,” she added.

Last mile delivery is defined as the movement of goods from a transportation hub to the final destination as fast as possible. The rapid surge in the logistics industry and an increase in the demand for the last mile delivery services is driving the growth of the market.

Dubai, United Arab Emirates - Reporter: Alkesh Sharma: Rita Huang, founder and CEO of start-up iMile. Thursday, February 27th, 2020. DIP, Dubai. Chris Whiteoak / The National

The global last mile delivery market is forecast to reach $61.57 billion in the next five years, from $31.19bn in 2018, expanding at a compound annual growth rate of 10.2 per cent, according toLondon-based researcher Brandessence Market Research.

After raising an undisclosed initial seed capital from angel investors, Ms Huang founded the company in June 2017.

“We are excited to have strategic investors on board who understand how iMile is challenging the status quo in last mile delivery,” said Ms Huang, who has nearly a decade of experience in the Middle East and North Africa region.

“This [new] funding will enable us to continue our work of creating innovative last mile solutions and scale our business.”

Before starting iMile, she was the chief technology officer of an Alibaba-Meraas cloud computing joint venture in Dubai. Prior to that she was the country manager for Huawei in the UAE.

Some of the iMile’s clients include e-commerce companies such as Amazon, Noon and Mumzworld, together with leading China-based fashion and lifestyle platforms such as Shein and Club Factory.

The company is working on both business-to-business and business-to-consumer segments, enabling Chinese merchants to sell on platforms such as Amazon and Noon in the region.

“We are catering to the end consumers as well,” said Ms Huang, adding the company's services include collecting an order from Chinese warehouses, cross-border shipment, custom clearance in the UAE and Saudi Arabia, then delivering the product to the customer’s doorstep.

It is also offering warehouse and fulfillment facilities in the UAE and Saudi Arabia, where sellers can keep their goods and iMile’s staff will prepare orders and deliver, when required.

Currently, the company has around 700 employees spread across the UAE, the kingdom and China. Nearly 40 per cent of its staff are engineers, engaged in developing last mile technology. It plans to increase its technical team two- to three-fold moving forward, she noted.

The company, which is already breaking even, last year saw a near 10 times year-on-year increase in new bookings.

“There are quarters when we are profitable while sometimes we are only touching the break-even point,” said Ms Huang, who is now looking for a local investor for the next round of funding.

Ms Huang sees the coronavirus outbreak as an opportunity to prove the business's agility.

The SARS outbreak in China in 2003 was a turning point for the country’s largest e-commerce players, such as Alibaba, she said.

“When the demand for delivery of fast-moving consumer goods, pharmaceuticals and other daily necessities ramped up, the e-commerce and last-mile delivery sectors will evolve in order to keep pace with the needs of the market.”