Kenzz, an e-commerce platform bringing shopping to the mass market in Egypt and MENA, is announcing that it has raised $3.5 million in seed funding. U.S.-based and MENA-focused venture capital firm Outliers Ventures led the round. Some of the participating investors include HOF Capital, Foundation Ventures, and Samurai Incubate.
The company, founded this February by Ahmed Atef, Mahmoud Al Silk and Moataz Sami, said it will use the seed round to grow its product categories, widen the product categories on its platform, hire talent and invest in tech as it launches its app.
You can compare the e-commerce landscape in Egypt to fintech across Africa in that there are more startups in that sector than others; reports say 20% of tech startups in Egypt are in the e-commerce and retail sectors. Several factors drive the creation of such startups in the country, including a young and urban population that has increased in tandem with internet and mobile penetration rates rising over the years. About 40% of Egyptians purchase consumer goods online weekly, according to data.
However, some, like Kenzz’s founders, believe that internet penetration levels and shopping numbers in Egypt mask the reality that e-commerce is yet to be fully realized and optimized in the North African country and, more widely, across the MENA region. Chief executive officer Atef told TechCrunch that they launched Kenzz for this purpose: to deepen e-commerce adoption in Egypt.
Online shoppers in Egypt mainly purchase items on big e-commerce platforms such as Souq, which rebranded as Amazon Egypt in 2021; Jumia; and Noon or social commerce platforms that utilize Facebook pages and groups in a B2B2C manner. Atef argues that while both models have managed to increase e-commerce activities in Egypt, the big e-commerce players neglect the mass market and instead focus more on the three largest cities Cairo, Alexandria and Giza — while smaller social platforms tend to provide unreliable and unorganized service. Thus, Kenzz was built to fill in the lapses from the two models: make products available to the mass market and offer them in an organized manner.
“We’re going after a completely different segment that Amazon and the big platforms are not looking at as they are centralized in big cities and towards the people who are comfortable buying online,” said Atef. “What we’re doing is bringing that experience much closer to the masses and building a reliable, trustworthy e-commerce platform that caters specifically for the mass market, solving for the barriers to buying, whether it’s trust, affordability and relevance, while capitalizing on social engagement and social interaction aspects of e-commerce.”
Kenzz’s model is akin to players like Taager because it’s social. However, the mass e-commerce solution is taking a B2C approach as it removes the middleman/resellers, sources products directly from local manufacturers and offers them to consumers. Therefore, consumers know the exact brand selling to them, Atef said. The platform also gives consumers discounts of up to 65% when they make collective purchases with friends and family. According to the CEO, sourcing directly from manufacturers and importers enables it to secure the best deals for consumers — and the group buying feature facilitates more referrals, bringing down its customer acquisition costs. Group orders can also be sent to single locations to reduce consumer delivery fees and logistics costs for Kenzz.
“Most users didn’t see the need to pay for deliveries as they could buy offline and get the product themselves. However, they are finding out that they pay more for transportation. So what was interesting in the pilot is that we’ve seen that people want to share this burden as it became a major pain point when we talked with consumers,” the chief executive said. “So when you’re buying with your friends, we can deliver the order to one place. They get to unlock more savings when they choose this approach.”
Alef also stated that Kenzz’s model helps stakeholders on the other end — local manufacturers and SMEs — by providing data on what consumers want and access to such consumers among additional insights.
Kenzz is yet to launch fully into the market as it is fine-tuning offerings to meet consumers’ demand, which, according to Alef, was grand when the platform soft-launched for two months. He said thousands of customers used the platform within this timeframe, with 50% ordering from outside Egypt’s big cities. “Those numbers help prove this vast potential outside the big cities where people were not comfortable buying online. But when you’re so relevant to them, in terms of brand products, prices and experiences, you unlock this huge potential.”
In a statement, Sarah AlSaleh, a partner at Outliers Venture Capital, said the asset-light Kenzz is solving two key issues that current e-commerce incumbents are not addressing: affordable and reliable last-mile logistics and an uncompromising customer trust philosophy. She references Kenzz’s founding team — with experience from Vodafone, Google, Amazon and Jumia — as one of the reasons Outliers invested. “The diversity and depth of Kenzz’s founding team strongly positions them to combine a multitude of experiences and expertise into creating a category-defining company and e-commerce champion for Egypt,” said the partner.
Kenzz, an Egyptian e-commerce platform for the mass market, grabs $3.5M seed funding by Tage Kene-Okafor originally published on TechCrunch
