MarkaVIP's $10 Million Series B Funding to Boost Logistics
Middle East flash sales sites MarkaVIP is on its way to becoming a true success story with its latest gambit to tackle the hydra that is regional delivery. How? Putting to use the $10 million in series B funding that it announced last night.
The funding comes primarily from European venture firm Prime Ventures, with support from New York City-based Invus Financial Advisors (IFA), San Francisco-based Lumia Capital- both of which invested in MarkaVIP's $5 million series A round- and Antwerp-based Hummingbird Ventures, which entered in the $3 million seed round.
In the press release, founder and CEO Ahmed Alkhatib, who founded the company in 2010 after working at Zazzle for several years, said "We actively pursued this funding to focus on decreasing product delivery lead times and improve quality across the board."
The mandate to focus on delivery comes as no surprise; e-commerce sites across the board have been confessing to Wamda that this is by far their biggest challenge.
Pamir Gelenbe of Hummingbird Ventures, who serves as Board Director at MarkaVIP, confirmed to Wamda today that the site is specifically looking to enhance customers' logistics experience. "That's the real value-creating part of the business, and it's a primary challenge in any e-commerce venture in the Middle East."
To streamline their process, MarkaVIP is experimenting with running their own delivery services in Jordan and Lebanon, and potentially expanding this to the Gulf.
Better serving their biggest market- Saudi Arabia- will also mean establishing more on-the-ground presence, with local warehouses and personnel. "You have to be local to succeed in Saudi," says Gelenbe.
One thing is clear: if MarkaVIP can solve these riddles by finessing their way to a flawless delivery system, they will set a template for every other fledgling e-commerce site in the region.
Other startups can also take comfort in the fact that regional demand for online retail is unquestioned. MarkaVIP released its numbers at Arabnet 2012 and again yesterday: it has 1,500,000 registered users, two million unique visitors per month, over 200,000 daily visitors, and 370,000 Facebook fans. It's adding over 5,000 new members a day, and seeing accelerating uptake in terms of conversion from member to buyer, says Gelenbe. On average, someone who makes one purchase returns to purchase on average about once a month. This January, MarkaVIP surpassed competitor Sukar in terms of traffic, according to Alexa.
As the site continues to expand swiftly, a fresh $10 million will push the ambitious company to become not just a leading e-commerce site in the MENA region, but an excellent e-commerce experience, period.
"We're not at all sitting on our laurels," says Gelenbe. "We're continuing to build a service that delights customers every single time. If we can achieve spotless customer service, we'll be successful in the long term."