Fetchr secures Series-C funding on back of technology, leadership and strategy overhaul
Revitalised investor confidence helps the company raise USD 15Mn; aims for an additional USD 10Mn by the end of this year
Fetchr, the MENA region’s leading logistics-on-demand company, has announced that it has received a fresh capital infusion of USD 15Mn as part of its Series-C round of funding. After approval of the new funding at its Extraordinary General Meeting (EGM) on 20th August 2020, the company is confident of raising a further USD 10Mn before the end of 2020 as start-up funding has begun to look up in the region. This financing success with renewed investor confidence comes on the back of a significant technology, leadership and strategy overhaul that has seen operations streamlined and the adoption of a new direction that will culminate in a complete re-brand by the end of the year. The company’s prospects have also been buoyed by the sudden spurt in the on-demand delivery sector due to COVID-19 that has led to a lasting shift in consumer behaviour. Post COVID-19, major retailers in the GCC have seen an increase in online sales ranging from 50 per cent to 800 per cent and now 90 per cent of consumers in KSA and UAE are purchasing online.
Investors including BECO Capital, Tamer Group, CMA CGM and its logistics arm CEVA Logistics, are committed to support the company over the long term. Tamer Group was an early investor in Fetchr when it took part in the 2018 round of funding and CMA CGM joined in early 2019. The support of these strategic investors will enable Fetchr to grow its top-line, diversify its revenues and expand its operational footprint. They have backed the company during its painstaking transformation period and will be key partners in the company’s future.
Investors are confident of Fetchr’s credible plan to reach break-even EBITDA by the latter part of 2020, after a 77 per cent improvement in group EBITDA that has been achieved already. They see value in its revenue diversification strategy for different product lines. In addition, growth plans for taking the company global and reach China, the US, UK and EU region, are expected to improve financial results and valuation. The company is also exploring strategic partnerships with global service providers and large retailers and is implementing a unique asset-light business model for accelerated growth.
The massive overhaul at Fetchr, over the past several months was brought about by a Transformation Team formed by Gate Capital, and includes Hussein Hachem, former CEO of Aramex, Iyad Malas, former CEO of Majid Al Futtaim, Munther Hilal, Founder of Gate Capital and Mazen Mamlouk, former CEO of Falcon Aviation who was appointed as Interim CEO. The Transformation Team not only secured a USD 10Mn bridge loan from key investors but also appointed a new management team with Hussein Wehbe, former UPS and Aramex Managing Director (Middle East), as the new CEO in addition to key seasoned talents in executive positions. In addition, a new board was proposed at the EGM consisting of Colin Bryant representing New Enterprise Associate, Dany Farha of BECO Capital, Youmna Assaf representing CMA CGM and its logistics arm CEVA Logistics, Laurent Viguier of Tamer Group and Mazen Mamlouk of the Gate Transformation Team.
Fetchr’s transformation team has made several key changes to the company’s operations. It closed non-performing country offices, improved efficiencies and reduced costs by diversifying revenues and streamlining call centre operations. It improved the technology platform and increased automated scheduling through AI, WhatsApp and other channels. Its new Performance Predictor System, a machine learning model, accurately predicts the delivery of an order based on over 2,500 data points.
Fetchr has sharpened its KSA focus by activating its own Courier and Express Clearance license in the country. It strengthened the network by on-boarding outsourced last mile service providers and cut costs at pick-up and drop-off points.
Speaking about creating the new Fetchr, Interim CEO Mazen Mamlouk said: “I’m pleased to note that the work done by Fetchr’s Transformation Team has placed it in a great position to take advantage of new opportunities as well as to meet new challenges. It took a lot of hard work and tough decisions, as we optimised operations, diversified revenue streams, reduced costs and charted a clear path to profitability to bring about the turnaround in the company’s prospects. We are now looking at a much more nimble and agile operation that is geared up to challenge for industry leadership. The Transformation Team would also like to thank investors who are committed to our new vision that creates more value based on syncing new technology with the needs of the emerging digital economy in our region. We will remain engaged to support the company in a more strategic and consultative role as we proceed with our US, China, EU and UK expansions.”
Hussein Wehbe, new CEO of Fetchr concludes: “Retail, e-Commerce and individual customers can expect to see a competitively efficient and speedy operation that translates into lower costs and higher end consumer happiness. We have developed a great product mix for B2C, B2B and C2C clients and differentiate from traditional logistics companies by offering flexible cash solutions among other incentives. The positive impact brought about by Fetchr’s AI implementation and technology overhaul has also been matched by the recruitment of solid managerial talent that will take it towards a better future. We look forward to announcing new strategic partnerships with global service providers and large retailers, unveil our re-branding initiatives and to solidify our corporate culture by the end of this year.”
Middle East & Africa is the only region forecasted to have a cross-border e-Commerce market (est. USD 26Bn in 2020) larger than its domestic e-Commerce market (est. USD 17Bn in 2020) this year onwards. Hence it is essential for delivery players to develop strong global e-Commerce relationships to take advantage of this trend. Fetchr can now facilitate the business of global e-Commerce clients in the region by fulfilling both their first and last mile logistics needs. It controls the entire package journey end-to-end with a proximity to consumers via hyper-local, cost-effective solutions and an enhanced network of pick-up and drop-off points and mini sortation hubs.
In a region with high smartphone and Internet access, e-Commerce is yet to reach its potential as it will only garner an expected share of 12 per cent of total retail by 2020. The last mile remains unconquered territory with significant challenges and costs for retailers. Fetchr’s drive to deliver goods faster and cheaper to consumers’ doorsteps will help support large retailers build an Omni-channel presence. Its lean and asset-light operations and network expansion by partnering with local service providers are well positioned to address the retail industry’s urgent needs.
Founded in 2012, with a cloud technology platform and digital-only approach, Fetchr was born to disrupt the traditional supply chain model. Today, Fetchr is a logistics solution provider enabling global and domestic e-commerce partners by fulfilling the end-to-end journey to their customers. Fetchr is currently operating in the UAE, KSA, and Egypt. Our more than 1,500 employees are dedicated to providing the best delivery service within the region and beyond. They live and work by our core values, which are the driving force behind all current and future services and solutions we provide: transformation, innovation, customer-centricity, agility, flexibility, and approachability.
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