Kenzz, an Egyptian mass-market e-commerce platform, secures $3.5M in seed funding • TechCrunch
Kenzz, an e-commerce platform offering mass shopping in Egypt and the MENA region, announces that it has raised $3.5 million in seed funding. Outliers Ventures, a US-based venture capital firm focused on the MENA region, led the round. Some of the participating investors include HOF Capital, Foundation Ventures, and Samurai Incubate.
The company, founded in February by Ahmed Atef, Mahmoud Al Silk and Moataz Sami, said it would use the funding round to grow its product categories, expand product categories on its platform, hire talent and invest. in technology when it launched its app.
You can compare the e-commerce landscape in Egypt to fintech across Africa in that there are more startups in this sector than others; reports indicate that 20% of tech startups in Egypt are in the e-commerce and retail sectors. There are several factors driving the creation of such startups in the country, including a young and urban population that has grown alongside increasing internet and mobile penetration rates over the years. About 40% of Egyptians buy consumer goods online every week, according to the data.
However, some, like the founders of Kenzz, believe that the internet penetration levels and number of purchases in Egypt obscure the reality that e-commerce is not yet fully realized and optimized in this African country. North and, more broadly, in the MENA region. CEO Atef told TechCrunch that they started Kenzz for just that purpose: to deepen the adoption of e-commerce in Egypt.
Online shoppers in Egypt mainly purchase items from major e-commerce platforms such as Souq, which was rebranded as Amazon Egypt in 2021; Jumia; and Noon or social commerce platforms that use Facebook pages and groups in a B2B2C way. Atef asserts that while both models have been successful in increasing e-commerce business in Egypt, the big e-commerce players are neglecting the mass market and focusing more on the three largest cities of Cairo, Alexandria and Giza – while smaller social platforms tend to provide unreliable information. and unorganized service. Thus, Kenzz was built to address the shortcomings of both models: making products accessible to the mass market and offering them in an organized fashion.
“We’re targeting a completely different segment that Amazon and the big platforms don’t look at because they’re centralized in big cities and at people who are comfortable shopping online,” Atef said. “What we’re doing is bringing that experience closer to the masses and creating a reliable and trustworthy e-commerce platform that specifically caters to the mass market, solving barriers to purchase, whether it’s it’s about trust, affordability and relevance, while capitalizing on the social engagement and social interaction aspects of e-commerce.
Kenzz’s model is similar to players like Taager because it’s social. However, the mass e-commerce solution takes a B2C approach as it cuts out middlemen/resellers, sources products directly from local manufacturers and offers them to consumers. Therefore, consumers know the exact brand being sold to them, Atef said. The platform also offers consumers discounts of up to 65% when making group purchases with friends and family. According to the CEO, sourcing directly from manufacturers and importers allows him to get the best deals for consumers – and the group buying feature facilitates more referrals, reducing his customer acquisition costs. Bulk orders can also be sent to single locations to reduce consumer shipping costs and logistics costs for Kenzz.
“Most users didn’t see the need to pay for deliveries because they could shop offline and get the product themselves. However, they find out that they are paying more for transportation. So what was interesting about the pilot is that we saw that people want to share that burden because it became a major issue when we spoke with consumers,” the chief executive said. “So when you buy with your friends, we can deliver the order to one place. They can unlock more savings when they choose this approach. »
Alef also said Kenzz’s model helps stakeholders at the other end – local manufacturers and SMEs – by providing data on what consumers want and accessing those consumers among additional information.
Kenzz has yet to fully launch into the market as it refines its offerings to meet consumer demand, which Alef said was grand when the platform was soft-launched for two months. He said thousands of customers used the platform in that time, 50% of whom ordered outside major Egyptian cities. “These numbers help prove this vast potential outside of the big cities where people weren’t comfortable shopping online. But when you’re so relevant to them, in terms of branded products, price and experiences, you unleash this enormous potential.
In a statement, Sarah AlSaleh, partner at Outliers Venture Capital, said asset-lightening Kenzz addresses two key issues that current e-commerce incumbents are not addressing: affordable and reliable last-mile logistics and a philosophy of uncompromising customer trust. She points to Kenzz’s founding team – with experience from Vodafone, Google, Amazon and Jumia – as one of the reasons Outliers invested. “The diversity and depth of Kenzz’s founding team strongly positions them to combine a wealth of experience and expertise in building a category-defining business and e-commerce champion for Egypt. “said the partner.