Logistics company Fetchr raised $15 million (Dh55.1m) and intends to secure another $10m before the end of the year as funding for start-ups in the region picks up after the coronavirus-driven slowdown.
The funding round will help the company increase its revenue and expand its operations to China, Europe and the US, Fetchr said yesterday.
Investors that took part include Beco Capital, Tamer Group, French container transport and shipping company CMA CGM and its logistics arm Ceva Logistics.
Tamer was an early investor in Fetchr when it took part in the 2018 fundraising round while CMA CGM came on board early last year, Fetchr said.
The third round of the capital-raising process reflects investor confidence in Fetchr’s plans to achieve break-even in earnings before interest, taxes, depreciation and amortisation in the latter part of 2020, the company said.
“They [investors] see value in [the company's] revenue-diversification strategy for different product lines,” Fetchr said.
It said plans to expand to China, the US, the UK and the EU region are expected to improve financial results and the company's value.
Fetchr said it is exploring strategic partnerships with global service providers and large retailers and taking on an asset-light business model to hasten growth.
It agreed to as much as $25m in funding after raising up to $10m from new and existing investors as part of a turnaround plan, a company representative said in December.
Funding for start-ups is picking up pace after the virus-driven slowdown affected venture financing during the second quarter of this year.
Despite this, fundraising by start-ups in the Middle East and North Africa reached $659m in the first half, an increase of 35 per cent from the previous year, according to data platform Magnitt.
Fetchr’s new funding round comes on the back of a technology, leadership and strategy overhaul that streamlined operations.
The transformation team, which includes Hussein Hachem, former chief executive of Aramex; Iyad Malas, former head of Majid Al Futtaim; Munther Hilal, founder of Gate Capital; and Mazen Mamlouk, former chief executive of Falcon Aviation, also secured a bridge loan of $10m from key investors.
Fetchr said Hussein Wehbe, former UPS and Aramex managing director in the Middle East, leads the new management team.
“We are now looking at a much more nimble and agile operation that is geared up to challenge for industry leadership,” Mr Mamlouk said.
“We [the transformation team] will remain engaged to support the company in a more strategic and consultative role as we proceed with our US, China, EU and UK expansions.”
The company said its growth prospects were boosted by a sudden spurt in the on-demand delivery sector due to the Covid-19 pandemic that has led to a lasting shift in consumer behaviour.
Many retailers in the GCC have registered increases in online sales that range from 50 per cent to 800 per cent.
About 90 per cent of consumers in Saudi Arabia and the UAE – two of Fetchr’s core markets – now purchase products online.
“Retail, e-commerce and individual customers can expect to see a competitively efficient and speedy operation that translates into lower costs,” Mr Wehbe said.
“We look forward to announcing new strategic partnerships with global service providers and large retailers ... by the end of this year.”