FlapKap Offers Revenue-Based Financing to E-Commerce Brands in MENA, Receives $3.6M in Seed Funding • TechCrunch

According to recent studies, the e-commerce market in Saudi Arabia, the United Arab Emirates and Egypt is worth a total of $21.4 billion and is expected to grow by more than 50 percent to $33.3 billion in the next three years. And as MENA consumers increase their business spending, it’s becoming increasingly important for online stores to position themselves to take full advantage of the growing phenomenon.

FlapKap, using a revenue-based financing platform (RBF), is helping these stores address the growth-destroying challenges emerging online stores face as they try to meet customer demand. The company, which allows e-commerce businesses to scale and grow, is announcing that it has raised $3.6 million in seed funding to boost its efforts by targeting businesses with limited access to banking or venture financing.

Ahmed Kucha and Khaled Nassef founded FlapKap in 2022. Sherif Bichara and Adel Hodroj are in the founding team. In the year It was in 2014 when the CEO was at Coacha, a digital agency that handled projects for Fortune 500 companies, that he noticed the potential for late payment and working capital businesses. For example, most of Kijami’s customers always pay late, sometimes 30 to 120 days after a sale closes.

“We always thought to ourselves that it should be the exact opposite. Larger clients with larger amounts of money shouldn’t be the ones getting the most flexible payment terms from agencies. Small and medium enterprises should be struggling for cash and growth. They should be getting support,” CEO Kocha told TechCrunch.

In the year In 2021, Kucha spent some time in the US and saw the rise of income-based financial platforms in the country and the West, Clearco and Wayflyer. The idea emerged to replicate the same surgery for MENA, hence the launch of the FlapKap. The company primarily serves SaaS and e-commerce platforms, like most revenue-driven finance companies, but has more customers on the former than the latter.

Because e-commerce operations spend a lot on advertising, marketing and inventory, these brands have flexible payment terms that suit FlapKap’s business as they take out loans to make late payments or take out loans. “SaaS is still in its infancy in the Middle East, but not yet at scale. On the other hand, e-commerce is growing in all parts of the world, with the current financial infrastructure in the Middle East and Africa being under-utilized,” he said, adding that his company would prefer e-commerce brands in both regions.

FlapKap’s business model is one where it funds the costs of e-commerce platforms and reimburses these brands when they pay a percentage of their revenue until payment is completed. In other words, FlapKap adds a fixed fee — a percentage of their revenue over a certain period of time — to whatever amount their customers access the platform. FlapKap claims to have helped its clients achieve over 85% increase in revenue and over 70% net profit in just a few months.

The revenue-based financing company for e-commerce platforms, which is growing 300% quarter-on-quarter, said it has partnered with dozens of customers from Egypt and the United Arab Emirates in six months. Some of them include Dress Code, Raw African, Palma and Tam Shoemaker. FlapKap is expected to soon integrate AI-based insights and financial data analytics with Shopify, WooCommerce, Facebook and Google, creating additional partnerships, it said in a statement.

“In addition to the financial solutions we provide to our partners, we provide other value-added services. Therefore, we always want to position ourselves as a growth partner; we are not just finance,” said the CEO. “We want to drive growth. We have a model work in progress to identify the growth potential of the clients. It’s a model we’re building now and improving every day with the data we’re gathering.

This latest capital injection comes six months after FlapKap’s pre-seed round and the investors on board are strategic to FlapKap. QED, for example, has invested in some of FlapKap’s global partners, such as Wayflier and Fairplay. A fintech-focused venture capital firm used the arm bolt to make investments in the Middle East to complete the transaction. There are also Egyptian government-backed Nclude, legacy pan-African investor A15 and Outliers. “I’m excited to build FlapKap with them,” said Kucha. “I think they are not just investors; They are true partners in what they do for us now and what we expect them to do in the future,” Koucha said.

With the new funding, FlapCap plans to increase its capacity to help more e-commerce businesses scale in the MENA region and maximize their growth potential, as well as strengthen its revenue-based financing presence in the region. The company aims to strengthen its e-commerce presence in Saudi Arabia, the United Arab Emirates and Egypt by increasing the volume of its current inventory and digital advertising, and paying later on a variable payment basis. Gbenga Ajayi, Partner at QED, commented on the investment: “Having invested and worked with similar companies on FlapKap in other regions such as Europe and Latin America, we are confident that this group can achieve similar success.

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