UAE start-up Zon raises $8m in funding and plans to expand
Founded in 2018, the company sells a variety of products with more than 32,000 sellers on its platform
Zon, a Dubai-based mobile e-commerce company, raised $8 million (Dh29.36m) in a seed funding round and plans to expand its services into Saudi Arabia in the second half of the year, the start-up said on Thursday.
“At a time, when price consciousness and delivery speed are transforming customer expectations, we must be able to provide a better e-commerce experience to the modern consumer,” said Arif Saiyad, chief executive and co-founder of Zon.
Zon sells a variety of products, has more than 32,000 sellers on its platform and over 17 million stock-keeping units registered on its channel.
Aside from venturing into the Arab world's largest economy, the company also plans to extend its reach to the wider Middle East and Asia, Mr Saiyad said. The latest seed funding round was led by Dubai-headquartered ASA Ventures, a venture capital firm, and a consortium of three private investors.
Founded in 2018, the company aims to provide smaller, offline retailers a chance to keep their businesses going by “facilitating their transition to online sales where they have more opportunities” to connect with customers, he added.
“Zon empowers the digital transformation of smaller retailers … giving them direct exposure to more customers by providing a plug-and-play mobile platform completely free of charge,” Mr Saiyad said.
Thanks to a deep internet penetration in the Middle East and North Africa, as well as soaring smartphone popularity, the e-commerce market is booming. The regional industry is expected to more than triple to $28.5 billion (Dh104.68bn) by 2022 from $8.3bn in 2017, according to research from Bain & Company and Google.
The UAE, the Arab world’s second-largest economy after Saudi Arabia, is the most advanced e-commerce market in the region with a penetration rate of 4.2 per cent, followed by the kingdom at 3.8 per cent.
Marwan Al Damrawi, an entrepreneur, who has invested in Zon in the seed round, said that the UAE base will help the start-up to accelerate its expansion in new markets.
"The UAE is a haven for entrepreneurs, looking to build out tech-based platforms that can then be scaled and exported or aggregated to larger markets. It is one of the best places in the world to incubate a revolutionary idea," said Mr Damrawi.
Zon is also planning to launch a mobile app for consumers in the second quarter of this year that will be free and compatible with Apple and Android operating systems.
Zon considers the coronavirus outbreak an opportunity to show business resilience and serve more customers.
Because of the global health crisis caused by Covid-19, retailers have observed a 40 to 50 per cent downturn in brick-and-mortar sales for the first quarter versus the previous year, said Mr Saiyad.
“Due to mobility restrictions and fear of going to public places, consumers are turning to e-commerce for their daily needs.”
Updated: March 30, 2020 09:40 AM