A platform that brings shopping to the mass market in Egypt and the Middle East has raised $3.5 million in seed funding. The firm that led the round was U.S. based and focused on the Middle East. HOF Capital is one of the investors that participate.
The seed round will be used to grow the product categories, widen the product categories on its platform, hire talent and invest in tech.
According to reports, 20% of tech startup in Egypt are in the e- commerce and retail sectors. A young and urban population that has increased in tandem with internet and mobile penetration rates is one of the factors that drives the creation of such startup. 40% of Egyptians purchase consumer goods online every week.
However, some, like Kenzz's founders, believe that internet penetration levels and shopping numbers in Egypt mask the reality that e- commerce is yet to be fully realized in the North African country and across the region. The purpose of Kenzz was to deepen e- commerce adoption in Egypt.
The majority of online shoppers in Egypt purchase items on big e-commerce platforms such as Souq, which rebranded as Amazon Egypt in 2021, and Noon or social commerce platforms that use Facebook pages and groups in a B2B2C manner. The big e-commerce players neglect the mass market and instead focus more on the three largest cities Cairo, Alexandria and Giza, while smaller social platforms tend to provide unreliable and disorganized service, according to Atef. Kenzz was built to fill in the gaps by making products available to the mass market and offering them in an organized manner.
"We are going after a completely different segment that Amazon and the big platforms are not looking at as they are centralized in big cities and towards the people who are comfortable buying online" Building a reliable, trustworthy e-commerce platform that caters specifically to the mass market, solving for the barriers to buying, whether it's trust, affordability and relevance, is what we're doing.
Kenzz's model is similar to Taager because of its social nature. The mass e-Commerce solution takes a B2C approach as it removes the middleman/resellers, sources products directly from local manufacturers and gives them to consumers. Consumers know the brand they're buying from. Consumers can get discounts of up to 65% when buying with friends and family. The CEO says that it is possible to get the best deals for consumers and that the group buying feature will bring down its costs. Group orders can be sent to single locations to cut costs.
Users didn't see the need to pay for delivery as they could buy the product themselves. They are paying more for transportation. The chief executive said that the pilot showed that people wanted to share the burden as it became a major pain point. We can deliver the order to your friends. When they choose this approach, they will be able to unlocked more savings.
Kenzz's model helps stakeholders on the other end by providing data on what consumers want and access to them, as well as additional insights.
When the platform soft-launched for two months, it was grand, but it is yet to launch fully into the market. Thousands of customers used the platform within this time period, with 50% ordering from outside Egypt. Outside of the big cities, people were not comfortable buying online. When you are relevant to them in terms of brand products, prices and experiences, you are able to open this huge potential.
Sarah AlSaleh, a partner at Outliers Venture Capital, said the asset-light Kenzz is solving two key issues that current e- commerce incumbents are not addressing: affordable and reliable last-mile logistics and an uncompromising customer trust philosophy. One of the reasons Outliers invested was the experience of Kenzz's founding team. The partner said that the diversity and depth of Kenzz's founding team positions them to combine a multitude of experiences and expertise into creating a category- defining company and e- commerce champion for Egypt.
Egyptian social e-commerce platform Taager raises $6.4M led by 4DX Ventures
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