Arzan VC Investing in On-Demand Technology
ArzanVC, founded by Hasan Zainal in 2014, is one of the few venture capital firms in the MENA. Focused on actively supporting startups in the region and those outside, who want to come to MENA region, ArzanVC has invested in Careem, Jamalon, Tamatem, MenaCommerce, CoContest in 2015. In 2016, they continue to invest in startups with MENA angle and their latest investments include Kuwait-based startup Boxit and Silicon Valley startup OnFleet.
Arzan VC’s latest investments include Kuwait-based startup Boxit and Silicon Valley startup OnFleet.
Boxit is an on-demand storage company which started in Kuwait in early 2015 and aims to replace the traditional self-storage model. Customers can request storage boxes through the mobile app/web, and receive the boxes at their doorsteps within 24 hours. Once filled, Boxit picks up the boxes and stores them at secured partnered warehouses.
Boxit have raised a seed round which has helped them to expand to the UAE as well as scale their marketing and operations in Kuwait, and are currently focusing on growth in the UAE and expansion to larger markets such as KSA and Egypt.
While Boxit does face some competition from traditional self-storage companies, it has a competitive advantage of not owning a warehouse but rather renting space from other warehouse owners. This not only enables the company to scale faster but also allows them to utilize unused storage capacity of existing warehouses.
OnFleet is a technology company that optimizes delivery and transportation operations of local businesses. The startup developed software that makes it easy for SMEs to dispatch and track their own fleet, and serves businesses ranging from groceries and restaurants to flower shops and pharmacies. OnFleet also created a driver network that allows merchants to connect with third party delivery providers.
OnFleet’s competitors mainly serve organizations with large fleets such as taxi operators, logistics companies, postal services, schools, car rentals and ambulances and have not been able to cater to mobile on-demand economy. Moreover, the competitors have no customer-facing apps and are more focused on field service businesses whereas OnFleet focus on local delivery businesses and on-demand services.
Startups in the ‘on-demand’ sector, which offer speedy services on a smartphone app, have been seeing an unmatched surge in venture capital. According to venture capital research firm CB Insights, funding for on-demand companies jumped 514% from 2014 to $4.12billion in 2015, and new investments early last year totaled at least $3.78 billion. By the end of April 2015, the number of venture capital investors that had done a deal in on-demand mobile services reached 198, and that number is only expected to multiply as the on-demand industry grows.