UAE's Awok.com raises $30m in first outside fundraising round

Cash will be used for expansion plans in Saudi Arabia and Egypt

Ulugbek Yuldashev, founder and chief executive of Awok.com. The firm is looking to expand. Christopher Pike / The National

The e-commerce platform Awok.com raised $30 million (Dh110m) in its first outside fundraising round, which it will use to expand operations outside the UAE to Saudi Arabia and Egypt. It will also open its online marketplace to third-party sellers.

"We started six years ago with $30,000," Ulugbek Yuldashev, founder and chief executive of Awok, told The National. "Now we're working with 1,000-times more [money], which means we need to grow exponentially across the region."

The company, which employs 700 people in the UAE, is looking to double or treble that figure by year-end, Mr Yuldashev said. Awok will hire to support new fulfilment centres and operations and marketing roles in Saudi Arabia and, eventually, in Egypt.  

The financing round was jointly led by StonePine ACE Partners – a joint venture between private equity firm StonePine Capital Partners in Dubai and ACE & Company in Geneva – and Al Faisaliah Ventures, the newly created corporate venture capital arm of Al Faisaliah Group, and investment group Endeavor Catalyst.

Renan Baroukh, principal at StonePine Capital, told The National the company was enticed to invest by strong e-commerce figures for the region. 

StonePine found that the "value e-commerce" market – defined as discount, typically non-name brand products sold online – is worth around $180m in the UAE, approximately 8 per cent of the total e-commerce market, and is forecast to grow five-fold by 2022. In Saudi Arabia, the value e-commerce market is worth $470m and is projected to grow more than four-fold in the same time period.

“We really see Awok as being the Alibaba of the Middle East,” Mr Baroukh said. 

Growth in the middle to low-income population and online shopping penetration are the main drivers for growth, according to StonePine.  

Awok is looking to compete directly with Amazon’s Souq.com in the third-party seller space, Mr Yuldashev said.

To date, the company has merchandised the site on its own, with at least 80 per cent of its budget-friendly consumer goods – from electronics and sports gear to bassinets and sunglasses – coming from China. Opening the site up to outside merchants will mean a greater variety of goods and lower prices. 

"The start-up ecosystem in the region is the Careem story, the Souq.com story," Mr Yuldashev said.

"There is definitely big momentum in the region that is being created, people have been waiting for this moment for some time."