Saudi startup WeDeliver picks up $2.4m in biggest pre-seed funding to date in Kingdom

Stock - WeDeliver
WeDeliver co-founders Mohammad Abu Kwaik and Ahmed Ramahi intend to take the concept to other regional markets. The company uses freelance drivers to handle all the deliveries and does not own any of its warehouses. Image Credit: Supplied

Dubai: A Saudi startup focussing on delivery services, WeDeliver, has raised $2.4 million, in what is said to be the biggest ’pre-seed’ funding round to date in the kingdom. The company launched last year in April and has recorded double-digit growth rates as businesses and individuals began to rely on delivery providers for everything from food orders to parcels.

WeDeliver plans to add new markets apart from widening the existing network in its home market, Saudi Arabia. Rather than have its own fleet, the company uses its digital platform to deliver customer parcels through freelance drivers who might be in or around that area.

“Using crowdsourced freelance drivers, and under-utilised warehouses for storage and hubs that include easy-to-find locations such as [fuel] stations and local shops for collection and delivery, reduces delivery costs for the market,” the WeDeliver said in a statement. The portal does not directly employ any drivers or any warehouse itself, with the “business model aligned to other cost-effective industry disruptors such as Uber and Airbnb”.

Looking for more alliances

The startup, which saw its pre-seed round being oversubscribed, plans to partner strategic institutional and individual investors “who can add value beyond capital and support the promising expansion plans”. “Our asset-light collaborative model is likely to disrupt intra-city logistics, enabling faster, more efficient, and low-cost delivery for businesses and online customers,” said Ahmed Ramahi, CEO and co-founder. (He was formerly an operations manager at the ride-hailing firm Careem, now part of Uber.)

Current partners include Saudi logistics company Salasel Alemdad; VEST, an investment company; Palestine Paltel Telcom Group; the Mutasami family fund; Arcom Technologies; as well as angel investors from leading management consultancies, members of the Riyadh chamber of Entrepreneurship Organization, and Kassim Legal.

Mohammad Abu Kwaik, Chief Technology Officer and co-founder, said: “With the new funds we will improve the automation of our operations, in addition to building our own data warehouse. There is huge demand for technology skills in the MENA region; at least 45 per cent of our overall staff complement by the end of 2021 will be technology specialists.”