In most parts of Africa and the Middle East, the experience of consumer travel and buying furniture is not fun.. A typical shopping process involves searching for the best price and quality and asking for recommendations and checking the offline store one after the other..
One-stop shops are rare to find, especially large offline shops that can In abundance Meeting the needs of consumers in the MENA region. To meet this need, household goods and furniture marketplaces have been launched in the region in the last three years.. Egypt’s Homzmart is one such, and today the company is announcing that it has closed its $ 15 million Series A investment.
company Was established By Mahmud Ibrahim and Ibrahim Mohammed in 2019, but it did not launch until the first quarter of 2020. This round of funding follows a $ 1.3 million seed investment raised in February last year. According to the company, this increased the total amount to $ 17.2 million.
MSA Capital of China, one of the investors in Homzmart’s seed round, co-led this Series A investment with Nuva Capital. Other participating investors include EQ2 Ventures, Impact 46, Outliers Capital, Nuva Capital and Rise Capital.
The furniture industry in Egypt has been Historically Characterized by poor accessibility for consumers. Homezmart’s marketplace collects the designs, price ranges and other details of its retailers’ products and solves high distribution costs for them by providing access to consumers with flexible financing options.. In addition, Homzmart said that it incorporates AI to optimize content for retailers and intelligent devices to help customers make their purchasing decisions.
“As a market, we stand between supply and demand. So we connect suppliers of furniture and household goods to consumers, ”CEO Mahmud Ibrahim told ClearTips in an interview. “Buying furniture in Africa and the Middle East is almost like a big hassle. And I think When it comes to home products, it is a pain all over the world when it comes to one place that you can shop for all your needs.. “
In the last 12 months, Homezmart has claimed a 30-fold increase in sales. It also showcases over 55,000 products from thousands of brands and merchants. Tapping into the online marketplace with speed Expanding an $ 8 billion industry where the region’s 14 million customers search for furniture online monthly.
It was only right at the beginning of the epidemic when Homzmark made his hard start and raised his seed round. Ibrahim said the company was uncertain that it would survive due to the expected behavior change in consumer spending. But the opposite happened. Customers in Egypt started liking the product, resulting in higher sales, like most marketplaces and e-commerce platforms saw this past year.
“Initially, we were very concerned and not sure how customers would react to buying furniture online during an epidemic in the Middle East.. So we’re really astonished by the traction because it seemed like this area was waiting for something like this to happen. “
The growth experienced within the epidemic was one of the reasons MSA Capital decided to double down on startups. As the firm’s general partner Ben Harberg stated, “The epidemic exposed the extreme weaknesses and inefficiencies of the Middle East’s archaic offline retail ecosystem, logistics and supply chain.”. Homezmart steps into the void as a digitally capable next generation An online marketplace and customized logistics provider for large-commodity retail addressing both consumer and enterprise customers.“
Another reason behind the investment, the firm said, is that both founders have vast experience in e-commerce and fulfillment. Ibrahim Jumia was VP of Egypt operations before becoming group COO of Daraz, a Southeast Asian company acquired by Alibaba in 2018.. Mohamed Is also an alumnus of Jumia and was part of the logistics development and expansion team in Egypt.
However his experience with various verticals in day-to-day commerce in Jumia and Daraz was invaluable., The founders chose to launch in the niche furniture market Instead of building models similar to their former employers. Ibrahim said of developing niche products, “We decided that this is a really good field on which we need to focus and hold ourselves accountable for digitization in the field.”
Homzmart’s first year in business was about understanding supply and demand. MENA is a strategy to expand into the region, helping to meet the demand of a young and rapidly growing consumer middle class over the next few years..
“Whatever we did in Egypt, we need to do it all over the region.” Don’t feel homezmart In college An Egyptian platform, rather a regional platform, ”the CEO said.
The company Strategic Commenced operations close to Damietta City, Egypt to focus on this regional market opportunity. City Is known To be one of the largest furniture manufacturing centers in the Middle East and thus allows Homezmart to streamline the region’s vertical industry supply chain. An integral part of this supply chain is handling logistics and movement of products from merchants to buyers. The company said that a large part of the investment will be used For this effort.
What happens next for the company when logistics are handled?
“I would say that what keeps me awake at night is that our business is growing very fast. And we need to make sure that we are building the right institutional infrastructure for that business, to make sure that after two or three years, we are building a very solid, multi-billion dollar business Are constructed like,“Ibrahim commented.