Dukkantek unveils plan to lend capital to small retailers

September 12, 2022, 9:55 AM

Dukkantek, founded by (from left) Ali Al Sayegh, Sanad Yaghi and Shadi Joulani, has raised $10m funding

Retail tech specialist has secured $10m in pre-series-A funding
It aims to explore ‘working capital lending solutions’ for its clients
Dukkantek’s software is used by 13 million retailers in Middle East

Retail tech company Dukkantek is set to move into small business lending after securing $10 million in a pre-series-A funding round.

The company, whose software is used by 13 million retailers across the UAE, Oman, Qatar, Kuwait, Bahrain, Turkey and Saudi Arabia, hopes to become a global force, with North Africa earmarked as the next stage of expansion.

Co-founder Sanad Yaghi told AGBI that the funding would also support Dukkantek’s plans to provide working capital loans.

“Our plans are very much to become a global micro, small and medium enterprises empowerment platform,” he said.

“For the types of merchants we work with, cashflow is critical to support the business, themselves and their families. Any slight change in consumer demand can heavily impact their overall quality of life and their ability to expand their business to one or two more locations.

“As part of our exploratory value creation sessions that we conduct with our merchants, we discovered that in the GCC certain months of the year offer significantly different potential revenue estimates because of the seasonality in tourism and population etc.

“We felt that working capital lending solutions would be critical to not only ensure the sustainability of their business, but also allow them to use times with less growth to maximise any potential renovations or lengthy business development projects that would mean they’d significantly increase their revenue come winter.”

Dukkantek was founded in January 2021 by Yaghi, Ali Al Sayegh and Shadi Joulani.

Yaghi said: “We typically do 7-9 new cities a quarter and have plans to increase that rate in the coming few months, which would mean North Africa would only be the start.”

Originally aimed at grocery businesses, the platform is now used by retailers in 70 different sectors, with clothing and electricals prominent alongside food and drink.

The latest funding round was led by BECO with significant participation from Rocketship and Colle Capital. Other strategic investors included Comma Capital, AMK Investment Office, Chaos Ventures and Wamda Capital. It follows a $5.2 million seed round in October 2021, taking total funds raised to $15.2 million.

Yaghi said: “For too long, the owners of small and medium-sized businesses have been left on the margins of the technology shift; now we are serving their unmet needs. We bring a technology platform that enables these merchants to compete in a digital world.”

The coronavirus pandemic hastened digital adoption in the MENA, with a huge increase in online shopping. The region’s e-commerce market is expected to reach $49 billion in 2025, up almost 55 percent from 2021, according to a report from EZDubai and Euromonitor International. In the UAE alone, the e-commerce market is forecast to be worth $8 billion in 2025.

Yaghi said community retailers without a digital presence, who were unable to accept online payments during the pandemic, were badly hit by the drop in customer footfall.

“Many merchants struggle to keep track of inventory when selling both online and in physical stores, so having one system that incorporates both parts of the business is very important,” he said.

Dukkantek will now focus on adding new services, with the working capital plan and data analytics capabilities top of the list.

Yaghi said: “We have seen an increase in users accessing analytics tools on the platform which, for example, help them understand which products will sell best. Three-quarters of the businesses on the platform are now trading in this way. Also, many merchants are keen to expand the number of stores they operate, but are held back by the lack of finance available in the region, which we can look to explore.”

Machine — Dukkantek’s system takes payments, while also generating inventory and profit reports for retailers

Electronics, Computer, Tablet Computer — Dukkantek’s system takes payments, while also generating inventory and profit reports for retailers

How Dukkantek’s platform works

The Cloud POS is a point-of-sales system that allows businesses to track transactions and sales, calculate VAT, generate reports and calculate profit margin.

Cloud inventory management helps users monitor stock levels and value and manage fast-moving products. The software also manages cash, card and credit payments. It generates inventory and payment reports.

E-commerce functionality allows stores to sell their goods online or through an app, while its companion app helps the retailers run their stores online by monitoring cash movements and payment methods.