Sary, the Saudi-based B2B marketplace that connects small businesses with a network of wholesalers and manufacturing brands via mobile and web applications, has raised a $30.5 million Series B round led by VentureSouq (VSQ), which is backed by Fund of Funds – Jada, Al Waha Fund of Funds (Bahrain) and other institutional investors and sovereign wealth funds in the MENA region, with the participation of new investors Rocketship.vc a Silicon Valley-based fund, STV, and current shareholders Ra’ed Ventures, MSA Capital, and Derayah VC.
Sary was founded in April 2018 by ex-Careem GM Mohammed Aldossary and his co-founder Khaled Alsiari. The company has disrupted the grocery market’s procurement experience in Saudi, leveraging technology to cut the friction in the country’s retail supply chain through connecting micro and small-sized retail businesses and FMCG wholesale market players. Since its inception, the company’s apps were installed by over 100,000 users, and during the pandemic alone, Sary was able to serve over 30,000 verified retail businesses, moving 4 million tons of goods across 3 main Saudi cities: Riyadh, Jeddah, and Dammam.
“Covid-19 was a catalyst for digital transformation, and Sary was strongly positioned to provide the Supply Chain 2.0 that gives wholesalers, manufacturers, and retailers instant accessibility and better visibility to buy and sell goods via a single platform. Our focus has been on the FMCG categories, but we believe it is just a stepping stone to reinvent the supply chain of the Saudi retail market that’s worth $165 billion,” said Aldossary.
This new round of funding will help Sary grow its geographical footprint, expand its suite of products and services, and move into new categories. It puts the company in a good position to own the wholesale and distribution value chain in Saudi. By eventually integrating third-party financial services on the Sary platform, marketplaces will be empowered to provide a superior user experience, allowing them to break into major industries that currently have low-tech penetration. Additionally, Sary is developing native and integrating third-party FinTech products to create an overarching FinTech list of offerings to serve more needs of its clients as well as diversify the revenue away from its marketplace towards FinTech streams.
“Core to VentureSouq’s overall FinTech thesis is the emerging trend of embedded financial services. In Sary’s case, we see this move into credit as directly contributing to top-line growth, diversifying revenue streams, and improving unit economics for a strong, proven vertical-specific technology company. We’ve seen similar business models win in other emerging markets, and we believe that the MENA market as a whole represents a similarly interesting opportunity.” VSQ Co-Founder and General Partner Suneel Gokhale explained.
VSQ General Partner Maan Eshgi added, “Sary is a great example of how tech startups in the Kingdom are leading innovation, creating more jobs for Saudis and contributing to the GDP growth, and has proven to be a critical solution particularly during these times. Most importantly, we believe this team along with its stakeholder base have the capabilities, resources and sufficient moat in place to be in a unique position to scale this business across the region.”
