Egypt’s FlapKap closes $3.6 million seed round

E-commerce enterprises in Egypt are set to benefit from expansion plans by FlapKap after the Cairo-based revenue-based start-up closed a $3.6 million seed round. The round, announced earlier today, included participation from Bolt by QED,  Nclude, Outliers, and A15.

FlapKap’s latest capital injection comes six months after the company’s pre-seed raise. It also coincides with the start-up recording significant milestones of a month-over-month growth of 200% in funding disbursed and serviced clients.

With the new funding, FlapKap says it will increase its capacity in helping more e-commerce businesses in Africa and the Middle-East to scale and maximise their growth potential. It also wishes to consolidate its position as the region’s foremost and leading revenue-based financing player.

The company aims to solidify its presence in Saudi Arabia, the UAE and Egypt by offering e-commerce businesses the ability to scale their inventory and digital ads now, while flexibly paying later.

Co-founded by Ahmad Coucha and Khaled Nassef, FlapKap enables e-commerce businesses to scale and grow by targeting businesses that have traditionally had limited access to bank or venture capital financing.

It offers insights and analytics to e-commerce businesses to help them accelerate growth and swift access to working capital financing for deployment on inventory and digital marketing spend.

Coucha, who is also FlapKap’s chief executive, says, “As we develop our platform and expand our capacity to enable even more e-commerce platforms to attain their full growth potential, we’re excited to be joined by prominent global investors with deep knowledge and extensive expertise in the revenue-based financing space, having previously invested in some of our international peers.

“Our rapid growth within a short period of time demonstrates the massive unmet demand in our region and, being founders ourselves, we take huge pride in being able to offer this founder-friendly financing to founders and entrepreneurs all across the region.”

The company prides itself on fast and data-driven decision making, which allows it to make merchants an offer less than 48 hours after they sign up. Fees are paid back as a percentage of revenues, meaning that if revenues slow down, so do repayments, and merchants do not have to worry about late fees or penalties

Targeting e-commerce businesses which have been operational for at least six months, FlapKap’s new capital and low entry threshold means it is able to welcome a lot more online stores to its already expansive roster.

FlapKap has so far worked with some of the region’s most-promising e-commerce firms, some of which include Dresscode, Palma, Tam’s Shoemaker, and Raw African, amongst others, helping in some cases generate up to 85% increase in revenue and over 70% increase in net profits within a few months. FlapKap has also recently integrated its AI-based insights and financial data analytics with Shopify, Woocommerce, Facebook and Google, and expects to strike more partnerships with players in the ecosystem.

Gbenga Ajayi, a partner at QED, said, “Having invested and worked with similar companies to FlapKap across other regions such as Europe and Latin America, we are confident this team can attain similar success.”

The growing post-pandemic trend in online shopping presents a great opportunity for FlapKap to expand its specialised solution to solve the growth-destructive challenges of emerging online stores in the region.

Recent research suggests that the e-commerce markets in Saudi Arabia, UAE and Egypt alone account for a combined $21.4 billion and is projected to grow by more than 50% to $33.3 billion in 2025.

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