Can SearchinMENA.com raise the funds it needs to build an Alibaba for the Middle East?
[Update: Eureeca has extended SearchinMENA.com's campaign.]
After three years of building SearchinMENA.com, Syrian
entrepreneur Salim Akil is poised for the big break that will
finally allow him to scale the site into the region’s largest B2B
marketplaces for small businesses.
With less than a week left to go, SearchinMENA.com is
looking to raise $140,000 in investment on equity crowdfunding
platform
Eureeca, to build an Alibaba for the Arab world. Offering a
total of 7.22% in equity, this investment round values the company
at US$1.9 million. At time of print, it had raised almost $75,000,
just over half of its goal, from 22 investors.
If SearchinMENA.com can secure the rest in the next six days, it
will join ranks with Nabbesh
and
Harir to become the third company in the region to successfully
close a series A round of online contributions from angel
investors.
It’s an ambitious goal. Both Harir and Nabbesh asked for less, with
Nabbesh running a smooth campaign featuring investors that it had
spoken to offline. But Akil is nothing if not tenacious. He’s
personally wooed every single one of his 22 investors, and survived
two relocations to build a database from Dubai.
Today, SearchinMENA.com features 14,000 small and medium-sized
companies, 85% of which are based in the UAE, with 70 clients
paying between $300 and $1000 a year for premium profiles. By 2016,
Akil hopes to grow the company to 20,000 registered businesses and
2,000 paying clients, generating revenues of $2 million a year.
In theory, the opportunity is enormous. Alibaba, which launched in
1999, has expanded into a group of businesses that handled over
$170 billion in sales last year. Its flagship site, Alibaba.com,
which took on investment from Yahoo in 2005, now has a
rumored valuation of around $100 billion.
Initially, Alibaba.com launched as a B2B portal designed to connect
Chinese manufacturers with overseas buyers. Today, it connects
importers and exporters from 240 countries, alongside sister site
1688.com, which facilitates B2B trade within China, and
AliExpress.com, where small buyers can purchase goods at wholesale
prices.
SearchinMENA.com, on the other hand, is focused only on the
regional market, combining elements of Alibaba.com and Kompass.com,
a global B2B search engine based in Switzerland. With the tagline
“New channel to attract clients,” SearchinMENA.com allows regional
clients to gain access to a database of local and regional
suppliers and service providers.
From Aleppo to Dubai
Although the site is based in Dubai today, Akil has experience
owning a domestic market. When the idea first launched in Syria in
2010, with the name SearchinSyria.com, the site quickly amassed a
database of 3,500 companies- the largest in Syria- which brought
global client Kompass calling.
Unfortunately, as many can guess, Akil had to call off a potential
deal to launch Kompass Syria when conditions began deteriorating in
Aleppo. As electricity and internet blackouts grew, he quickly made
the leap to Lebanon, with the help of the Syrian Enterprise and Business
Center, along with local incubator Berytech, and mentoring
organization Mowgli.
Yet Lebanon at the time also seemed like potentially shaky ground.
Akil didn’t want to leap from the frying pan only to find himself
in another potential fire, he admits.
Akil again quickly relocated to Dubai. After a year of pitching to
investors, everywhere from Startup Weekend Dubai to DubaiSME to the
2012 MITEF Arab Business Plan Awards (where he
chatted with Wamda about his journey), Akil found a deal that
would allow him to set the company up in this new market: $100,000
in investment and nine months of incubation from Dubai Silicon
Oasis, a startup support vehicle backed by the Emirati government.
With DSO’s support, in exchange for a 35% equity stake, Akil gained
a foothold and began building the platform to become a regional
player.
From Dubai to the Middle East
The next round of investment on Eureeca- to which DSO has
contributed an additional $10,000- will allow the company to focus
on Saudi Arabia, where it now has a minority share of clients,
reach markets including Egypt, Turkey, Morocco, Kuwait, Lebanon,
Algeria, Iraq, and Libya, rebuild its website, launch a marketing
campaign, and grow its team to 50 by the end of 2015.
For now, the company is generating revenue by charging sellers
yearly subscription fees for premium profiles; in the future, it
will expand its premium services for sellers, turn on advertising,
and begin selling market information and premium accounts to buyers
as well.
Companies on the site generally see a 10-15% conversion rate for
the number of leads they generate, Akil says. One client that we
contacted, Sally Obeid, the marketing manager of digital agency
Yes 2 Digital, said that, the
company has secured business leads through the site, as well as
receiving applications for employment, through which it has
successfully employed new team members.
One investor, 26-year-old Ibrahim Aldasouqi, met Akil through a
friend in Dubai and decided to invest based on the opportunity to
support someone who’s also “young and full of ideas and energy,”
and the fact that SearchinMENA.com is, “doing something like
Google,” but from a business perspective. SearchinMENA “minimizes
the search scope,” he explains. The $40,000 he contributed on
Eureeca is his first investment in an internet startup.
Can SearchinMENA lure investors, businesses, and even a
potential partner?
Any site that offers offline businesses an opportunity to connect
with new clients should be able to find a market among the vast
number of businesses in the region with a limited online presence.
By beginning in Dubai, SearchinMENA.com is tackling the one market
where businesses might have less need for a new online presence; as
the project saw in Syria, it’s even more likely to be able to
attract companies in markets like Iraq, Algeria, and Libya, where
few suppliers are present online.
While the company only has six more days to raise its total,
things are looking up. Alibaba has come knocking, setting a meeting
the day that the Eureeca campaign ends. Akil has already shared his
vision with the Chinese giant, in hopes that they would consider
investment or acquisition. “I’m not sure what they want,” he
admits.
He’s certain, however, that SearchinMENA.com will hit their target.
“The first 35% is the hardest part of crowd investing. If you reach
that, that means you are going to make it to 100%.”