The funding round is led by Saudi-based Riyad Taqnia Fund and shared with UAE Exchange Group and GoCompare
Souqalmal.com raises $10m in Series B funding with investment from UK's GoCompare
Price comparison website Souqalmal.com has raised US$10 million in Series B funding to expand its regional presence and increase its offline service offering, with leading UK firm GoCompare joining the funding round.
GoCompare Group, which operates the popular UK comparison site GoCompare, is a minority investor in the funding, which is led by Riyad Taqnia Fund (RTF), based in Saudi Arabia, with UAE Exchange Group also participating.
“This is a massive landmark for Souqalmal.com,” said Ambareen Musa, the platform’s chief executive. “We’re the third company in the region to bring in a strategic international player so it proves a couple of things: one that the region is starting to attract international players to start operations here and test the market, and two that these players are choosing investment acquisition to get into the market, which is phenomenal.”
In March, e-commerce giant Amazon acquired Souq.com, the region’s largest e-commerce venture, for $580m and in August DiDi Chuxing, China’s largest ride-hailing firm, invested in Middle East online taxi service Careem.
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Philip Bahoshy, chief executive of the start-up online community platform Magnitt, said that Souqalmal.com’s Series B investment is strategic on three levels.
“[RTF’s] investment provides an anchor in the Saudi Arabia marketplace, which the platform will be able to grow within the kingdom; UAE Exchange provides a new distribution channel and know-how from a well-established existing player within the financial services domain, and GoCompare’s investment is extremely strategic in providing a two-way benefit,” he said.
“[Souqalmal.com] can receive funds, know-how, larger customer base and IT knowledge transfer and GoCompare is able to have a strategic anchor in the Mena region that provides insights into the market dynamics.”
GoCompare, which listed on the London Stock Exchange last November, has been operating in the UK since 2006 and is known for its television adverts featuring Welsh tenor Wynne Evans. Its half-year revenue for the six months to June 30 was £75.8m (Dh370m), up 4 per cent on the previous year.
Matthew Crummack, chief executive of GoCompare, said the company chose Souqalmal.com for its first overseas investment because “it is the clear leader in financial education and personal finance comparison in the Middle East”.
“With a youthful and tech- savvy population, the potential for growth in the region is huge and Souqalmal.com is the ideal partner for us here,” he added.
The Souqalmal.com funding is RTF’s second funding announcement of the week. The Saudi investor on Sunday was announced as the lead investor in a $5m funding round for Dubai-based peer-to-peer lending platform Beehive.
Adel Al Ateeq, acting chief executive of Riyad Capital, said that “financial literacy is a priority for Saudi Arabia”, something in which it believes Souqalmal.com can play a leading role. “The company’s personal finance services will also help financial products be more accessible for all in the kingdom and promote innovation in our financial services sector,” he said.
Ms Musa said that the partnership with UAE Exchange would result in Souqalmal.com, which offers online information on more than 3,200 banking, insurance and education products, introducing an offline presence for the first time, allowing it to reach the exchange house’s 15 million customers. Meanwhile, Ms Musa said its tie-up with RTF would open up the Saudi market as Souqalmal.com looks to become the first insurance aggregator operating in the country.
Promoth Manghat, chief executive of UAE Exchange, said the company is constantly “looking for the right investment opportunities”.
“Our approach to strategic investments hinges on three key factors, namely having a truly differentiated USP, the technology and IP assets of the firm in question and last but not the least commercial synergies with our operations. Souqalmal.com checks all these boxes,” he added.
“Now it’s about go, go, go,” said Ms Musa. “We’ve got the wind in our sail and it’s about focusing on the customer, the product and building up our regional presence. We are ready to invest into the brand, our regional presence and in marketing.”
Ms Musa said the round of investment started nine months ago with the company pitching its significant growth and streamlining to investors. The company’s insurance business has increased by 800 per cent over the past year, and the platform has optimised its product, slashing its customer acquisition cost by 80 per cent.
Souqalmal.com previously raised $300,000 in 2012 and $1.2m from the Antwerp-based venture capital firm Hummingbird Ventures in January 2014.
Mr Bahoshy added: “As the ecosystem continues to mature, many start-ups will look to international comparisons as a source of strategic funding to fuel their growth in emerging markets.”