Saudi B2B e-commerce marketplace Sary has raised USD 30.5 million in its Series B funding round led by VentureSouq, it announced on Thursday. The round was also joined by Silicon Valley’s Rocketship.vc, STV, and returning investors Raed Ventures, MSA Capital, and Derayah VC. This takes Sary’s total investment raised to over USD 37 million, making it one of the best-funded startups in Saudi Arabia.
Founded in early 2018 by former Careem general manager Mohammed Aldossary and Khaled Alsiari, Sary connects micro and small businesses (mainly grocery stores and food and beverage businesses) with wholesalers and FMCG brands, helping them procure inventory through its mobile apps. In a statement, the company said that over 100,000 users have installed its apps, and it has served over 30,000 verified retail businesses during the pandemic alone.
Mohammed Aldossary, co-founder and CEO of Sary, told MENAbytes that the startup witnessed 10x year-over-year growth in 2020 and is currently doing about USD 500 million in annualized GMV.
“COVID-19 was a catalyst for digital transformation, and Sary was strongly positioned to provide the supply chain 2.0 that gives wholesalers, manufacturers, and retailers instant accessibility and better visibility to buy and sell goods via a single platform. Our focus has been on the FMCG categories, but we believe it is just a stepping stone to reinvent the supply chain of the Saudi retail market that’s worth USD 165 billion,” he said in a statement.
Sary serves businesses in multiple Saudi cities, but its main business comes from Riyadh, Jeddah, and Dammam. It now plans to use the latest funds to further expand its geographical footprint, launch new products and services, and move into new categories.
The Saudi startup also plans to integrate third-party financial services on its platform, a move that will create more value for its clients and add an additional revenue stream to its business. It currently makes money by taking a cut from the FMCG brands and wholesalers on every order completed through its platform. The financial services will include lending solutions for businesses that use Sary’s platform. This is a massive opportunity as it is still not easy for small businesses to access credit. That is why there’s a lot of interest in this space from different Saudi startups—including Foodics, Lendo, and many others.
VentureSouq is also excited about the fintech prospects of the company. Its co-founder and general partner, in a statement, said, “Core to VentureSouq’s overall fintech thesis is the emerging trend of embedded financial services. In Sary’s case, we see this move into credit as directly contributing to top-line growth, diversifying revenue streams, and improving unit economics for a strong, proven vertical-specific technology company. We’ve seen similar business models win in other emerging markets, and we believe that the MENA market as a whole represents a similarly interesting opportunity.”
Maan Eshgi, who is also a general partner at VentureSouq and leads the firm in Saudi, added, “Sary is a great example of how tech startups in the Kingdom are leading innovation, creating more jobs for Saudis, and contributing to the GDP growth, and has proven to be a critical solution, particularly during these times.”
This article was originally published on MENAbytes.