Venture

Re-commerce marketplace Soum gets $18M backing to scale in MENA

The global re-commerce market is poised for growth as consumers increasingly settle for pre-owned goods to save on cost, and as some observe conscious consumption. With the global re-commerce market expected to continue its growth spurt, marketplaces like Saudi Arabia’s Soum are looking to capture users in the Middle East and North Africa (MENA) region.

Soum was founded in the Kingdom of Saudi Arabia in 2021, and is now eyeing growth expansion to other MENA countries, beginning with the United Arabs Emirates. The plans are driven by its recent $18 million Series A funding.

The round was led by Saudi’s Jahez Group with participation from New York-based Isometry Capital alongside existing investors Khwarizmi Ventures, AlRajhi Partners and Outliers Venture Capital. It follows $4 million in seed funding in 2021.

Beyond expansion, the startup, whose top listings are electronics, is also increasing the categories it covers by including products like automobiles and collectibles.

“We are expanding into different geographies and are looking at the whole MENA region. We have also started testing new categories to fulfill our vision of being a place where you can sell everything from phones to automobiles,” said Fahad Al Hassan, who co-founded Soum with Bader Almubarak and Fahad Albassam.

“We want to make buying and selling easier and accessible to everyone,” said Al Hassan, who previously worked as a consultant at PwC and strategy manager at Saudi’s interior transformation ministry.

Abdulaziz Alhouti, the chief investment officer of Jahez Group, the parent company of Jahez, the Saudi food delivery platform that went public in 2021, commenting on the round told TechCrunch: “The second-hand market has been exclusively dominated by classifieds and they did a good job, but as we progress in the digital age, we need to see something that is more convenient, frictionless, sustainable and that ensures trust. This is the preposition that Soum brings to the table.”

Soum manages the entire process from listing to delivery. Deliveries are supported by third-party logistics partners. To list products, sellers are required to send images of their items for pre-approval. The startup also processes and holds payments until buyers confirm receipt, as a precautionary measure for fraud.

Al Hassan said most goods take three to four days to deliver, and users have 24 hours to initiate returns, if products are unsatisfactory. It has plans to extend the return period to a week or even a month for some products.

The startup makes money through commissions for every item sold. The charge is based on a range of factors including supply and demand.

“The commission ranges between 10 and 20% of the product value. The higher the product value the less percentage and the more frequent the seller is the less it becomes; so, multiple factors are considered,” said Al Hassan, adding that Soum gets more than 30,000 listings every month. iPhones and laptops are the top selling products.

Al Hassan anticipates greater growth for the company as the uptake of homegrown solutions continues, and following Saudi Arabia’s push for local solutions to wade off reliance on international marketplaces. Besides, the country is said to be in the midst of a tech boom, with data showing a spike in the number of e-commerce businesses and uptake of e-services.

Courtesy by: TechCrunch

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