Opontia, a startup that acquires and grows e-commerce brands has raised $20 million in debt and equity in a seed round.
The seed round is one of the largest in the Middle East and Africa. Investors in this round include Global Founders Capital, Presight Capital, Raed Ventures, and Kingsway Capital. The angel investors that participated are also notable names in e-commerce across EMEA; they include Tushar Ahluwalia, CEO of Razor Group; Jonathan Doerr, the former CEO of Daraz and co-founder of Jumia; and Hosam Arab, the CEO of Tabby and the former CEO of Namshi.
Founded in March 2021 by Philip Johnston and Manfred Meyer, Opontia acquires high-performing e-commerce businesses in the United Arab Emirates, Saudi Arabia, Kuwait, and Bahrain from its offices in Dubai and Riyadh. The company plans to open in Cairo, Istanbul, and Lagos.
Often, when small e-commerce brands take off, their owner usually starts by being passionate about their product and customers. However, due to no fault of their own, most begin to reach a point of stagnation caused by constraints on working capital, operations, logistics, and e-commerce commercial management.
According to TechCrunch, Opontia was launched to take the burden off e-commerce brands by convincing them to sell their brands and for Opontia to manage all parts of their operations. But interestingly, like most companies that roll up e-commerce brands, these owners will continuously be involved with the day-to-day activities of building the brand.
The company is particularly interested in brands with at least $10,000 in monthly revenue and at least $5,000 in net profit per month. The categories of products they are interested in include less seasonal ‘all weather’ products which are things like kitchen products, bathroom, sport, home and living, cosmetics, and toys.
This business model of acquiring smaller e-commerce brands that look promising and consolidating them has already been successful in other countries like the U.S. and Europe, with Thrasio being the leading player in the space.
The capital raised will be used to fund the acquisitions and grow these brands, with the rest for expanding its team of e-commerce experts.
What they are saying
Philip Johnston CEO of Opontia said:
“We started Opontia to enable e-commerce entrepreneurs to realize the full potential of their brands. We want to do this both in terms of getting an exit now as well as benefiting from future growth. We also want to help nurture and build the entrepreneurial e-commerce ecosystem in the Middle East and Africa.”
Manfred Meyer co-CEO of Opontia said:
“The market in the Middle East and Africa is currently less mature than in the West but is growing faster than any other market in the world, with the number of sellers on marketplace growing at over 50% per year, The business model will work here because there have been so many amazing entrepreneurs in the Middle East coming up over the last few years. It’s a great opportunity for sellers to be able to realize some of the hard work from building their brand so that they can take a break or work on their next big thing.”