We are leading a $42.0m (SAR 157.6m) Series A round in Opontia, the leading e-commerce roll-up company in the CEEMEA region (Central & Eastern Europe, Middle East, and Africa). Opontia acquires and scales profitable e-commerce brands that sell on marketplaces as well as directly via social and D2C platforms. The company enjoys a first-mover advantage with a model that has witnessed rapid growth internationally.
E-commerce is a $20b+ market in MENA alone, where penetration is still significantly less than developed markets. We have witnessed the meteoric rise of many homegrown D2C brands first-hand, driven by visionary entrepreneurs from the region and products that are specifically tailored to local demand.
While these brands see rapid growth and healthy margins, they often plateau at a certain stage as founders run into challenging roadblocks ranging from capital requirements to operational challenges to logistics. Hindered by this, some brands have difficulty taking the business to the next level and fail to capture the full economic value of their creation. This is where Opontia comes in.
Over the past few years, we have been particularly fascinated with the e-commerce rollup model, where a company uses debt to acquire profitable, growing brands on marketplaces such as Amazon and Noon, as well as D2C brands that sell through social and the likes of Salla. While Opontia is the first mover in the region, the e-commerce roll-up model has gained traction internationally, with comparables like Thrasio (the fastest-ever profitable unicorn), Razor Group, BBG, and Perch raising hundreds of millions in equity and debt.
Simply put, Opontia is best thought of as a leaner, digital-age evolution of traditional house of brands (e.g. P&G, Unilever), owing to its focus on digitally-native brands. Driven by a team of highly-skilled professionals – with extensive experience at top-tier e-commerce companies such as Amazon, Namshi, and Noon – Opontia acquires such brands from founders and uses their industry expertise to supercharge their growth.
Platformizing roll-ups can bring about significant cost efficiencies, economies of scale, market insights, and acceleration. We are already seeing early signs of this; Opontia’s first acquisition, Novimed, jumped to an average growth of 163% month-over-month in sales after the acquisition. We believe that Philip and Manfred, Opontia’s founders, have the right pedigree, focus, and team to be the winner in this market in the MENA region and beyond.
The company currently has 50 employees with deep e-commerce expertise across its 4 core markets: Saudi Arabia, United Arab Emirates, Turkey, and Poland. Over the next 6 months, they are looking to double this headcount while also expanding to Egypt, Nigeria, and Pakistan.
We are thrilled to lead the $42m Series A investment in such a fast-growing company, alongside new investors Partners for Growth (PFG), the USA-based venture debt fund, and Upper90, a fund that was one of the earliest backers of Thrasio, as well as existing investors Raed Ventures, Kingsway Capital, and Presight Capital. The fundraise is a mix of equity and debt, which will help the company continue growing at break-neck speed. This is one to watch out for.
Do you have an e-commerce brand and are looking for an attractive exit? Reach out to Opontia here: https://opontia.com/