Flextock, a Cairo-based ecommerce logistics startup has raised $3.25 million in the largest pre-seed round of the Middle East & North Africa. The investment came from a mix of international and regional investors – including Foundation Ventures, MSA Capital, CRE Venture Capital, Alter Global, Jameel Investment Management Company, B&Y Venture Partners, Access Bridge Ventures, and Y Combinator. The startup was part of Y Combinator’s Winter 2021 batch. Its pre-seed was also joined by US-based multi-billion-dollar logistics scaleup Flexport, and multiple angel investors from the region.
Founded in 2020 by Mohamed Mossaad and Enas Siam, Flextock was launched earlier this year to offer fulfillment solutions to online businesses, in Egypt. Its on-demand warehousing and fulfillment platform takes care of picking up the inventory from businesses, storing it at Flextock’s fulfillment centers, processing the orders (pick, pack and prepare), and then shipping them to customers on behalf of the business.
They’re basically enabling online businesses of all sizes to outsource all their logistics needs – first mile, warehousing, last mile, cash collection, and returns. The merchants can access all the services through a dashboard that also allows them to monitor their inventory in real-time, keep an eye on their KPIs, and manage returns and cashback.
The Egyptian startup serves all types of businesses – including those that may need the service to deliver orders to other businesses (B2B) or even their own branches. Flextock did not share the details of its pricing but told MENAbytes that they replace merchant’s fixed operational costs of renting a warehouse, utilities, and monthly salaries of labor with variable cost by billing them on the actual number of utilized shelves in our fulfillment center and the number of orders delivered.
In a statement, Flexstock said that it has already signed over 100 merchants with 5,000 SKUs. The statement did not share more details but noted that the business is growing exponentially. According to Flextock’s website, its services are available for more than 15 industries – with 28 cities of Egypt covered by it. The website also notes that the startup has the capacity to store/fulfill over 300,000 orders on a monthly basis with a 99 percent accuracy rate.
Mohamed Mossaad, the co-founder and CEO of Flextock, commenting on the occasion, said, “Flextock is a purpose-driven company. We are on a mission to enable all merchants, regardless of their size, to efficiently scale their brands. This new funding will help us achieve that. With it, we can turbo-charge our growth
by further building our products and hiring a solid team.”
Prior to founding Flextock, he was the Chief Strategy Officer at Egyptian food ordering and delivery startup Elmenus. Enas Siam, Flextock’s co-founder and COO was previously with Careem – leading (now defunct) Careem Bus in her most recent role. Both the founders have previously also worked in the FMCG sector.
Enas, commenting on the investment, said, “We see a huge opportunity in powering the next generation of commerce in the region by allowing anyone to seamlessly start and grow an online business by leveraging our tech-enabled fulfillment and logistics solutions.”
In spite of the growth of ecommerce in the Middle East, logistics still remains one of the biggest pain points for both businesses and customers – who usually end up frustrated with poor last-mile delivery experience offered by the majority of the merchants. Many startups have made attempts to solve these issues but it wouldn’t be wrong to say that there hasn’t been any major breakthrough yet. Fetchr was one of the companies (in this space) that many were pinning their hopes on but it also failed to deliver and has since been trying to make a comeback with new management.
Flextock with the latest funds plans to expand to different new markets in the region before the end of the year so it would be interesting to see if it can address the pain points faced by online merchants – at affordable prices – in multiple markets. Felxtock’s investors, at least, are very confident of its prospects.
Alter CEO and Founder, Jesse Sullivan, said, “Our mission is to find and back the world’s top tech founders. Mohamed and Enas are clearly that. Through Flextock, they are igniting growth in the Middle East, which will inspire a rising cohort of entrepreneurs in that ecosystem. They are just the kind of high-character, role model founders we are looking for.”
Mazen Nadim, the Managing Partner of Foundation Ventures, said “We recognize the massive opportunity in logistics presented by the rise of e-commerce in the region. Flextock is building the underlying infrastructure so that any e-commerce player can scale their operations on-demand! We are proud to have been Mossaad and Enas’s first backers and thrilled for the journey ahead.”
In addition to the expansion, Flextock will also use the investment to strengthen its presence in the Egyptian market, further enhance its tech and products, and grow its team.
Source: Founded in 2020 by Mohamed Mossaad and Enas Siam, Flextock was launched earlier this year to offer fulfillment solutions to online businesses, in Egypt. I