Dubai-based instant grocery delivery service YallaMarket has raised $2.3million in an oversubscribed pre-seed funding round.
The funding, which comes after the company opened its first dark store three months ago, was co-led by Dubai Angel Investors and Wamda, with participation from MENA and Russia-based angel investors.
Currently operating three dark stores in Dubai, the investment will be used to continue YallaMarket’s growth in the UAE with the aim of having 100 stores across the country by the end of next year. The start-up also has its eyes set on regional expansion, with plans to open in Qatar in 2022 followed by Saudi Arabia at a later stage.
The company also plans to launch the production of ready-to-eat foods, under its private label.
YallaMarket’s business model relies on its speed and efficiency, delivering groceries – from an inventory of around 3,000 items – to doorsteps for free in 15 minutes.
“Our main competitive advantage is simply speed. Other online grocery stores are aggregators so they don’t know the stock’s stores. As a straightforward market, where we own everything, we are faster and more accurate,” explained co-founder Leonid Dovbenko.
Drawing on his experience as a “serial entrepreneur”, with 16 start-ups under his name, Dovbenko said angel investors are the way to go for start-ups at the early stages, with venture capitalists coming in later.
“At the beginning, when your start-up is still an idea, it is good to talk to angels. Usually angels are ready to believe in, and inject investments into, early stage business ideas. Using this money from angels, you can scale your business, achieve traction and at this stage you would be more interesting for VCs,” said Dovbenko.
“It usually takes time for VCs to make decisions, whereas angels can do so faster,” he added.
Dovbenko spoke of a mismatch in the start-up ecosystem where start-ups are “looking for angels, but don’t know where to find them, and angels are looking for start-ups to invest in, but are not coming across good ones”.
“But there are many angel networks in Dubai, and in Riyadh and Cairo, so a good idea would be to connect with entrepreneurs who have raised money through them for them to introduce you,” he added.
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