Our LinkedIn and Twitter have been exploding since NYE.
This issue is all about 40 ‘cause we reached 40. Not years. Startups in our portfolio. 😎
And to celebrate that in our ArzanVC way, Laith & I cooked for you…
Takeaway lessons on 40 investments… and “thinking” of a new fund
Last month we discussed dragon exits and, well, we can’t say that we have never stumbled upon a write-off. C’est la VC vie.
Let’s press ⏪ and dig into all we’ve seen, heard and learned so far.
Based on the performance of our 40 investments, these are the strongest sectors: transport, D2C and supply chain (incl. FMCG).
The traits of our successful startups
– Founder-market fit… that makes you really stand out.
– Healthy founder mix: Builder + Seller. We believe founders must be both builders and sellers. If one character is missing, it may be a very bumpy ride with a possibly bad end.
– Honest and humble.
– Talent for fundraising. We know that fundraising can be a hard nut to crack for many founders, so get skilled in the cracking! 🐿️
Lessons on pivots
Making a business pivot means changing your strategy (product, model…) during the journey. It’s something a startup is usually unprepared for. Sometimes the pivot comes out of necessity (as your only survival card), sometimes out of opportunity.
Some of our portfolio startups faced a pivot and managed it really well…
Do you recall when MUNCH:ON used to be called LUNCH:ON? It started as a platform that served offices Dhs25 lunches with free delivery. Then Covid happened, WFH took over the office life and the startup’s corporate lunches got a blow. But, within a matter of 10 days, the team was able to launch a residential lunch & dinner service on the same platform. The new vertical was well-received and the startup pivot became a success. Let’s just add that MUNCH:ON is currently operating in UAE and KSA, offers both corporate and residential meals and Q4’21 was its highest performing quarter to date.
Taker, the online ordering management platform for restaurants, wasn’t created from scratch. Its predecessor was Dook, a delivery management platform for more efficient and less costly restaurant delivery fleets. The founder soon realized the problem wasn’t in the delivery but rather in the demand generation and order quality. Therefore, in 2019, Dook founder created Taker to fix this problem and the company later introduced TakerGo (on-demand delivery aggregator) with a vision to make the on-demand delivery available as a service (DaaS) to all businesses that want to tap into the Quick Commerce. The pivot allowed Taker to adopt an asset-light model.
Armada Delivery is an on-demand delivery marketplace with a presence in Kuwait, Bahrain and Saudi Arabia. Its pivot was in the revenue model. Initially Armada paid fixed daily rates to its drivers, but the team soon realized that the drivers were not working full hours and the model was too costly. They changed the model to revenue sharing as in 80% for the driver and 20% for Armada. This means they only pay if the driver actually delivers. The pivot fixed all cash issues faced by Armada and they have been doing superbly well ever since and expanding.
PointCheckout announced earlier this week that it’s changing its name to Paymennt.com in response to the accelerated growth in the payments industry during Covid (thanks to its PayLink app launched in Q2’20 that allows merchants to accept payments via links). Originally launched as an online payment gateway for loyalty points, the company has grown to become a comprehensive platform for online payments helping over 2,000 small and medium businesses move to digital payment in a faster, cheaper and more customer friendly way… Well, the last quarter of 2021 was their best to date in terms of the payment volume and they have nearly 1.5K enrolled online stores. Pivot gone well.
Oh, the disappointments
1. Founders with bad attitudes. You do realize that your attitude will catch up with you sooner or later, right?
2. Team disputes & disagreements which led to a startup failure. Choosing your co-founders is like choosing your spouse. Give it a big, long thought.
3. Bad accounting in place. Fix that ASAP.
DON’T do this again
– Don’t Whatsapp your significant other while sharing your screen on a Zoom call.
– When you want to make an espresso or use the bathroom, PLEASE press mute first.
– @Laith, switch off your camera while driving or fixing your keyboard next time.
🔮 looking ahead
Arzan VC is proud to have hired individuals who had zero experience with the VC world at the time of hiring. We provided them with our knowledge and training and, for example, 2 of our former team members are now managers of regional funds. We say this humbly but proudly: ArzanVC Team has grown so much and we’re happy we could have shaped each and every team member and assist them in their growth and success. Because that’s success for us, too, and we can’t wait for what’s next for our Team because…
– we’re definitely going to see MORE EXITS.
– following the footsteps of Swvl, we could have another IPO.
– we may soon announce Arzan VC Fund III? 🤔
TL;DR (too long; didn’t read)
Laith and I rewind our 40 investments and discuss the characteristics of successful startups (incl. healthy founder mix!), examples of successful pivots in our portfolio (MUNCH:ON, Taker, Armada Delivery and Paymennt), what disappointed us most (founders' attitudes and team disputes, among others) and what's ahead of us (certainly more exits and upcoming Fund III).
Impressive rounds 💰
Retailo raised a USD 36M Series A funding (in which we participated), while TruKKer secured USD 96M in their very recent Series B round. Shall we add that Retailo bagged the 14th place in Forbes 50 Most Funded Startups of the Middle East? Well done, teams, well done!
Swvl secured an additional USD 21.5M PIPE investment from European Bank for Reconstruction and Development (EBRD) in preparation for its SPAC (expected in Q1’22).
PointCheckout rebrands to Paymennt.com to focus on micro and small business payment struggles.
New partners on the block
FlexxPay and Merit Incentives forge a partnership to offer employee benefits platforms for their corporate clients in the GCC and MENA region.
Women in leadership positions
Did you know Gameball‘s team is 40% female and that females represent 30% of its leadership team? The company also acquired 3x more paying clients in 2021 and 95% of users gave them 4-5 star reviews.
- Senior React Developer at Klaim (Lebanon)
- (Different positions) at Fatura (Egypt / hybrid remote)
- Business Development Executive at Cartlow (Riyadh)
- Backend Developer – Node.js at Repzo (Amman)
- Front-end Engineer at Qoyod (Cairo)
- Performance Marketing Executive (International) at Mejuri (London)
Oh and we’ll be seeing you soon at Step Conference (Feb 23-24) and Taqadam Investor Showcase (March 9-10). Reach out if you’ll be around 👋