Egypt’s FlapKap, a Egyptian fintech startup, has recently completed a USD 1.2 million fundraising round led by A15, a MENA venture capital firm known for backing early-stage startups across the region.
FlapKap is working to bolster e-commerce and software as a service (SaaS) growth in the Middle East and Africa (MEA) region and offers online businesses AI-based insight to help them optimize their advertising spend and maximize profits. The company offers its clients revenue-based flexible payment terms, on that advertising spend, to help ensure sustainable growth without cash constraints. The overall objective is to help e-commerce and SaaS companies to grow without facing large financial risk through the provision of favorable financing terms and by assisting them in better targeting their advertizing budgets.
Increasing ad spend through financing
“Our AI solution helps us to understand the client’s accounting processes, spending patterns and the correlation with the sales to determine if they have the potential to grow if there is an increase in their ad spend — one of the bulkiest expense items for firms,” said Co-founder/CEO Ahmed Coucha.
The company is currently operating in the UAE and Egypt and plans to launch in Saudi Arabia as the beginning of further expansion across the MEA, specifically Sub-Saharan Africa.
The company’s management team has experience in e-commerce, media and digital banking. Coucha is the co-founder of MENA advertising agency Kijamii and a Harvard graduate. The team also includes Khaled Nassef, co-founder/CTO and formerly of German neobank N26 and Amazon, Amr Gamal, COO, formerly of McKinsey and P&G, and Sherif Bichara, FinOps Manager, formerly at Helios and Lazard.
Regional potential
In 2017, Bain & Company reported the wider MENA e-commerce market to be worth $8.4 billion, with an annual growth of 25% since 2014, and predicted the market to reach $28.5 billion by 2022. FlapKap expects these figures to have increased substantially due to accelerated adoption due to the COVID-19 pandemic.
Coucha said, “We are delighted to announce our launch and fundraise, and have the backing of such an esteemed investor as A15 – one of the leading venture capital firms in the MENA region. It is a testament to our business model and validates our strategy. We have taken a proven international business model, and adapted it for the Middle East. Our solution empowers SMEs and startups to grow sustainably, without losing equity, and to help manage their cashflows. With a first-mover advantage and a huge market opportunity, we are excited to extend the growth opportunities we have unlocked for our early clients to the whole region.”