The e-commerce market in Egypt is expected to grow 30% to $7.5 billion this year, spurred by a growing number of younger shoppers and rising incomes.
Local merchants are essential in driving this growth and solving their logistical and operational needs end to end is where new upstarts in Egypt notice the most opportunity. Khazenly, founded in mid-2021, is one such startup. It is announcing that it has raised $2.5 million in seed funding.
Khazenly was launched by Mohamed Younes, Osama Aljammali, Mohamed Montasser and Ahmed Dewidar. It is an on-demand digital warehousing and fulfillment management platform that provides an omnichannel solution to help merchants digitize their businesses.
On a call with TechCrunch, chief executive Younes said Khazenly solves fulfillment issues for small and medium-sized merchants who focus on business and consumers. He argues that these merchants don’t have the resources to pull off renting a large warehouse and engage in manual processes when carrying out operations. Thus, Khazenly allows merchants and social commerce retailers to optimize their fulfillment processes digitally when selling online (B2C), via retail stores (B2B), marketplaces, cross-border or a combination of these channels.
“There is no player in Egypt matching the digital experience that we already have to manage both B2C and B2B,” the CEO said. “Though we solve both aspects separately, we are solving a big pain in the market by automating both.”
Younes also touched on the company’s focus on convenience. According to him, this, alongside its multifaceted client approach and data/AI-driven product, sets Khazenly apart from similar platforms in the market such as ShipBlu, Flextock and Bosta. “The combination of all this through the same platform allows us to have a big differentiation,” he said.
The platform’s use of AI and big data — stemming from the CEO’s background in that space after spending several years at IBM and Huawei — allows it to inform merchants on what products to stock concerning location and demand. At the same time, the rest of the executive and management team have experience in other segments of the business, having worked for the likes of DB Schenker, Uber, Amazon and Baker Hughes.
Khazenly also offers other services in addition to its warehousing and AI capabilities. They include cross-docking, transportation, delivery and cash collection services.
“Our clients carry out all these seamless experiences using our digital platform. Also, beyond the current fulfillment, we do many activities with our clients and support them in marketing and other value-added services,” said Younis.
The chief executive said his company operates an asset-light model as it doesn’t own any of the warehouses or delivery vehicles. For the latter, Khazenly partners with over 100 last-mile companies to fulfill delivery for its merchants. These merchants are charged varying monthly subscription fees calculated from their space allocated in the warehouse and the projection of orders.
“After the launch of three weeks, we found that some of the clients cannot calculate how much space their restock will consume in the warehouse,” the CEO said. “So we developed a calculator in which the client puts in very nice scalar quantities and automatically calculates how much space they will consume in the warehouse, estimates the number of orders and puts out a subscription range.”
While Younes declined to give exact figures on the number of merchants on its platform or gross merchandise value (GMV) processed, he said Khazenly’s GMV is in eight figures. At the same time, the company supports merchants in over 16,000 self-service activities. Some brands that have used Khazenly’s digitized fulfillment services come from industries like fashion and electronics to FMCGs such as XRPS by Tradeline and Mozare3.
The on-demand digital warehousing and fulfillment platform bootstrapped its way to a soft launch mid-last year and is just receiving its first institutional capital.
The round was co-led by regional VCs Arzan Venture Capital and Shorooq Partners. Participating investors include Camel Ventures, Averroes Ventures and a couple of angels.
There’s been an increased global focus on building more resilient e-commerce supply chains. According to Laith Zraikat, a partner at Arzan, backing Khazenly proves that the “logistics tech and fulfillment sector is still up for disruption.” For Tamer Azer, partner at Shorooq, Khazenly’s products and services have the capacity to drive forward the fulfillment industry in Egypt and the wider region.
The Egyptian startup plans to continue expanding its portfolio of data-driven products, it said in its statement. One of the products is its mobile dark stores, an offering that allows items to get shipped faster off the back of a more-efficient warehouse forecast.
Younis stated that proceeds from the investment would be used to quadruple the company’s facilities as it follows a roadmap of building more AI and data-driven products and expanding geographically.
“We are very excited and proud of what we did the last few months. And I believe in the coming days we will do even more strategic and key milestones to let our merchants grow even more,” he said.