We are leading an $8.5m (~SAR 32m) Series A investment round in Salla, the leading Makkah-based e-commerce enabler. With Salla, anyone can easily set up and manage an Arabic e-commerce store. We look to support Salla to grow and scale their business, which has already achieved SAR 2bn (~$533m) in GMV. The company already has the highest GMV of any such platform in the MENA region, and has seen significant growth from 2019 to 2020.
More and more people are relying on online channels for their day-to-day purchases. In fact, user penetration in the e-commerce market is at 66.1% in Saudi Arabia in 2019. Yet, the market size has not yet caught up. In order to reach the global average, the e-commerce market size in Saudi Arabia stands to grow 4 times, with the wider MENA standing to grow 7 times.
There are already signs that the region is catching up. According to a report by Bain & Company and Google, e-commerce in the region has been growing ahead of the global average with an annual growth rate of 25%. The GCC and Egypt account for 80% of the e-commerce market, and they have been growing at a 30% annual rate, more than twice as fast as the rest of MENA.
We are delighted to be supporting Salla, a champion of the e-commerce industry in Saudi Arabia and the wider MENA region. Salla allows anyone to easily set up an e-commerce store, among the first to do so in the region. This is critical, as e-commerce markets rely heavily on the infrastructure that they are built on to operate properly. Moreover, with building a local ecosystem at the core of its proposition, we believe that Salla has the right approach to contribute significantly to this market and enable the many players in it.
Salla’s platform features inventory management and marketing tools, as well as detailed reports on store performance and automatic invoices for orders, which enables e-commerce merchants to set up, maintain, and increase sales through their stores without any fees or commissions. Furthermore, due to a variety of payment and logistic partnerships, store owners do not have to worry about payment or delivery challenges once their store goes live – it is all taken care of.
The moment we met Salla’s founders Nawaf Hariri and Salman Butt, we knew that Salla is the play needed to catalyze the growth of the e-commerce market in Saudi Arabia and the wider MENA region. More importantly, we also immediately knew that they are the right team to do it. Nawaf and Salman started Salla in 2016, building on their experience and knowledge as founders and IT professionals.
They have the right mix of knowledge, industry experience, and market understanding to lead the charge. We are excited to invest alongside existing investors Raed Ventures and Vision Ventures to be part of their journey.