Going All In
Careem alumni Wahaj Ahmed, Talha Ansari, and Muhammad Nowkhaiz, cofounders of Retailo, used the pandemic incentive to quit their jobs and launch their own tech-based startup. With $45 million in funding raised in just 18 months, they’re looking to buy-nowpay-later for their next growth spurt.
Careem alumni Wahaj Ahmed, Talha Ansari, and Muhammad Nowkhaiz, cofounders of Retailo, used the pandemic incentive to quit their jobs and launch their own tech-based startup. With $45 million in funding raised in just 18 months, they’re looking to buy-now-pay-later for their next growth spurt.
IIn July 2020, as the pandemic swept across the global supply chain and everyone went online, undeterred innovators began looking for opportunities in areas that technology had not yet fully saturated. Three former Careem employees, Wahaj Ahmed, Talha Ansari, and Muhammad Nowkhaiz were so convinced of the potential they saw in business-to-business (B2B) e-commerce they quit their jobs to launch their own startup. Just 18 months later, in February 2022, they raised $36 million in a Series A funding round. “COVID-19 was such a big catalyst”, says Ansari, cofounder of Retailo. “We saw SME retailers struggling because of lack of technology while all the tech companies were thriving, and we wanted to enable community stores.”
Retailo allows community stores to buy day-to-day inventory through a mobile app and have it delivered within 24 hours. Since it was established, it has attracted total funding of $45 million from investors, including Graphene
Ventures, 500 Global, Agility Venture Partners, Aujan Group, Tech Invest Com, Mentor’s Fund, IMM Investment Global, Shorooq Partners, Abercross Holdings, Arzan VC, and AgFunder, alongside individual investors. Having initially launched simultaneously in Saudi Arabia and Pakistan, today more than 50,000 retailers have used the platform across 12 cities in Saudi Arabia, Pakistan, and the U.A.E.
The cofounders now plan to use their latest capital injection to accelerate Retailo’s entry into the buy-now-paylater (BNPL) space and further expand into existing markets. “SME retailers have not progressed because of inaccessibility to the main-stream financial system. By providing easy access we want to add more value to their business,” stresses Ansari.
Currently, Retailo’s home market of Saudi Arabia is still its largest market, followed by Pakistan and the U.A.E. The cofounders decided to launch in Saudi Arabia due in part to the overall regulatory and government push to transform the economy, particularly in terms of digitization. “The aspiration was to build the regional business with Riyadh as the headquarters, as KSA is a growing tech and economic hub,” says Ansari.
Before launching Retailo, the cofounders were already enjoying successful careers in Pakistan. The three friends worked for startups with VC company Rocket Internet— Ansari at Foodpanda and Wahaj at a fashion apparel e-commerce company now owned by Alibaba, while Nowkhaiz founded a B2C grocery and B2B retail startup. Wahaj went on to serve as an assistant general manager at Careem in 2016 before joining McKinsey as a fellow in May 2017. Meanwhile, Nowkhaiz became head of strategy for Careem and worked closely on the super-app’s evolution before it was acquired by Uber. In his last position at Careem, Ansari managed last-mile delivery and supplier side for MENAP as a senior director.
While they don’t think their Careem experience is the only reason for their success as entrepreneurs, Ansari does concede that it played a role. “For some of the investors, it gives them additional comfort that the founders have past experience in building a similar product,” he admits. “I think all of us experienced the kind of impact that we created firsthand, so that gives you a boost and confidence.”
The cofounders are currently confident that Retailo can reach 10 million SMEs by 2030, as they eye other MENA countries. “The idea is to make services available to the community stores and suppliers in a region of 700 million people and market that stretches from Morocco to Pakistan,” says Ansari, though he declines to name specific markets at this time.
However, as it makes plans for expansion, Retailo faces fierce competition in the region overall and in Saudi Arabia particularly. Many other players are also bagging huge investments. Saudi’s Sary has raised $112 million since it was established in 2018, backed by the Public Investment Fund’s fully-owned subsidiary Sanabil Investments, the Wafra International Investment Company, and Endeavor Catalyst. In Egypt, MaxAB and Capiter bagged $55 million and $33.4 million, respectively, in 2021 alone. And Morocco’s Chari closed a bridge round in January 2022 at a valuation of $100 million.
“It’s normal to see this vertical flourishing, since at its core, and in time, companies have similar consumer behaviors as individuals,” says Adrian Garcia-Aranyos, President of Endeavor Global. “A digital platform that solves marketplace frictions is an obvious evolution of the dysfunctionalities taking place in the physical world, in the same way that behavior shifted from consumer side with B2C marketplaces. This is a trend we’ve seen in other regions around the world too.” Garcia also believes that there are a couple of particularly promising markets regionally, “If I had to put the spotlight on two markets, I would definitely say Egypt and Saudi Arabia,” he adds.
According to a study by Wamda published in January 2022, B2B startups in MENA raised $1.5 billion in 2021, accounting for 52% of the total $2.9 billion raised by startups overall. But the Retailo cofounders don’t seem too worried about the competition. “It’s always good to have more players, especially in this space. I think there is still room for more,” says Ansari. “The retail market of MENAP is worth half a trillion dollars. It serves 700 million people and involves over 10 million retailers with many more million people in the connected space.”
When it comes to its 2022 targets, the startup is focusing on deepening its coverage within its existing markets, along with scaling its BNPL offering. Its internal targets are 30X growth on transaction value for BNPL, and 6X more for the e-commerce side of the business. However, while growth is on the radar, thoughts of an IPO currently are not. According to Ansari, it is too early to think of going public. “As long as we are able to raise money in the private market, we would like to keep it that way because the private market allows you to grow faster,” he highlights. It also gives them more control to focus on serving people in underserved markets. “It’s an amazing thing when you aspire to create value by providing technology to someone who has not been introduced to technology,” adds the cofounder.