MENA-focused FlapKap, A Startup That Provides Revenue-based Financing To e-Commerce Brands, Raises $3.6 Million In Seed Funding Round

FlapKap was founded this year by Ahmad Coucha and Khaled Nassef, with Sherif Bichara and Adel Hodroj on the founding team. According to the latest statistics, the e-commerce markets in South Arabia, the UAE, and Egypt (under the MENA region) are expected to see a growth of more than 50 percent to $33.3 billion by 2025. E-commerce businesses, therefore, have to bring themselves into a position to leverage the unending opportunities that this growth will bring. So, with its revenue-based financing platform, FlapKap wants to help these businesses to mitigate the challenges that’ll prevent them from leveraging the opportunities that the growth in e-commerce will create for them in the future. FlapKap, therefore, targets businesses with limited access to financing from banks or VCs.

Today, FlapKap is announcing that it has secured seed funding of $3.6 million which it will use to fuel its efforts to provide financing for e-commerce businesses. The latest funding comes six months after the startup raised its pre-seed round.

Prior to FlapKap, co-founder and CEO Ahmad Coucha was with Kijami, a digital agency upstart that conducted projects for Fortune 500 companies which he started back in 2014. His time at Kijami opened his eyes to problems such as late payment, and access to working capital, which Kijami and other businesses similar to his, faced. “We always thought to ourselves that this should be the exact opposite. Big clients with massive amounts of cash shouldn’t be the ones that get super flexible payment terms from the agencies; it should be the small and medium enterprises struggling for cash and growth. These should be getting the support,” CEO Ahmad Coucha said.

After spending some time in the US in 2021 and witnessing the rise of revenue-based financing platforms such as Clearco and Wayflyer, the CEO got the idea to replicate a similar operation focused on the Middle East and North Africa (MENA). And just like that, FlapKap was born. While it mainly serves SaaS and e-commerce platforms like revenue-based financing companies are known to do, FlapKap’s clientele consists more of e-commerce businesses.

The flexible payment terms of e-commerce operations go in line with FlapKap’s business as they spend a lot on advertising, marketing, inventory, and recurring activities responsible for these brands making their payments late or taking loans to remain in operation. Explaining why FlapKap prefers e-commerce businesses, the CEO said that “SaaS is still growing in its early stage in the Middle East, but it’s not yet sizable. On the other hand, e-commerce is booming in all parts of the world, and is underserved by the current finance infrastructure in the Middle East and Africa.” 

FlapKap operates a business model where it provides financing for the expenditures of e-commerce businesses and makes its money back when these businesses pay back a percentage of their revenue until repayment is complete. In other words, the startup adds a fee to the original amount of expenditures it covers for these businesses and splits it to be paid in percentages from their revenue within an allotted period. 

FlapKap claims to be growing 300 percent quarter-over-quarter and has helped generate over 85 percent increase in revenue, and an over 70 percent increase in net profits for its clients within the few months that it has existed. Flapkap says it has partnerships with companies across Egypt and the UAE such as Dresscode, Raw African, Palma, and Tam’s Shoemaker. 

Recently, the startup recently integrated its AI-based insights and financial data analytics with platforms such as Facebook, WooCommerce, Google, and Shopify. In a statement, it added that it expects to increase these partnerships. “Aside from the financing solutions we offer our partners, we also give them other value-added services to help them go further. So we always like to position ourselves as a growth partner; we’re not just financing. We want to drive growth for them. We have a work-in-progress model built for identifying the clients’ growth potential; it’s a model we are currently building and getting enhanced by the data we’re collecting,” FlapKap’s CEO said.

FlapKap’s investors are very strategic for its business. Its investors include QED, Egyptian government-backed Nclude, Pan-African investor A15, and Outliers. “I’m excited to be building FlapKap along with them. I think they are not just investors; they are real partners in what they’re doing for us now and expected to do in the future as well,” CEO Ahmad Coucha said.

FlapKap will use the newly-acquired funding to increase its capacity to provide funding for more businesses in the MENA region, fuel its efforts to grow, and strengthen its position as MENA’s leading revenue-based financing startup. “Having invested and worked with similar companies to FlapKap across other regions such as Europe and Latin America, we are confident this team can attain similar success,” Gbenga Ajayi, a partner at QED, commented on the investment.