New $800m ‘ultra app’ aims to shake up crowded Gulf market

Supplied

• Astra Tech’s platform offers services to users in UAE, Saudi and Egypt
• Planned community of apps to function in over 50 countries worldwide
• UAE online retail sector expected to be valued at $8 billion by 2025

A Dubai-based serial entrepreneur has raised hundreds of millions of dollars to set up a new digital platform that he claims will disrupt the way people communicate, shop, pay, and transact, when it launches later this year.

Abdallah Abu Sheikh, founder of Dubai-headquartered Astra Tech, calls his product, which is as yet unnamed, an ultra platform. He believes it will be “so much better” than the super apps currently on the market. 

“The super app space is ripe for transformation, and Astra Tech is here to disrupt and innovate. 

• Careem buys Dubai-based money transfer startup
• Dinner is served – but not like before

“In an effort to overcome profitability challenges, and poor unit economics, platforms have jumped from one business line to the next in an attempt to force users to complete more transactions with them,” he said.

“The result is an overabundance of complex and sluggish digital platforms that aren’t fit for purpose. Our goal is not to reinvent the wheel, but to repurpose familiar platforms to create what we call an ‘ultra platform’,” he added.

No building from scratch

It was first reported that Abu Sheikh was looking to raise $500 million dollars to fund the platform.

But he clarifies that the total value of the project is “north of an $800 million,” and includes cash funding and shares in other apps they have acquired.

One of his previous ventures was the Rizek app, which is similar to a super app in that it offers a range of services from cleaning, beauty and healthcare, to pet care, personal training and laundry. 

Launched in 2020, it raised $24 million, and is active in the UAE, Saudi Arabia and Egypt. It has a million users and a network of around 20,000 providers.

It was confirmed last week that Rizek will be one of the apps absorbed into the new ultra platform, along with several other acquisitions and partnerships yet to be announced. 

Abu Sheikh decided to adopt the acquisition model because he believes it’s cheaper than building new technology for added functions.

“I don’t really like to build things from scratch. If you look at the region over the past 10 to15 years, so much technology has been built and more of it was thrown away.

“Why do we need to build everything, which can take two to three years? We can achieve the same result by pulling together different platforms that people are already using, together under one structure,” he said.

The new platform has been operating in stealth mode for the last few months, with beta users testing it, but he is confident it will be unveiled soon.

“Probably by the end of Q3,” he confirmed. “We’re ready now. We’re just trying to phase out our acquisitions and our announcements, so people are more familiar with what we’re trying to do.”

Nothing ‘super’ about Careem

The obvious competition is Careem, which started as a ride-hailing app in July 2012.

Then it was bought by international rival Uber in January 2020 for $3.1 billion, and has repositioned itself as a super app with over 20 different services, ranging from restaurant and grocery delivery to courier, car rental and bill payment services.

“I’ve used it for a while until it became too crowded. so I stepped away from that platform,” Abu Sheikh said.

“There’s nothing super about an app that doesn’t have more than 50 million users. You’re not a super platform if you just have a bunch of links that take your users into other platforms.

“You’re not being a super app, you’re just acting as a link provider, making commission in the middle.

“That’s not very super if you ask any technology expert. That’s just showing that you’re very desperate to make money,” he added.

Careem declined to respond to Abu Sheikh’s comments when contacted by AGBI.

Supercharged app market

The app market in the UAE is increasingly crowded, especially since the pandemic was a catalyst for a surge in e-commerce.

The UAE online retail sector will be valued at $8 billion by 2025, up from $5 billion in 2021 and $2.7 billion in 2020, according to a report published in March by e-commerce hub EZDubai and global research firm Euromonitor International.

At the same time, a survey published in January by San Francisco-based digital advertising services firm AppsFlyer found that 84 percent of UAE businesses surveyed said mobile apps are now a ‘must’ to remain relevant to their customers.

Such apps spent $74 million last year on marketing costs to convince users to download their apps, a year-on-year increase of 35 percent.

The data also reported a 15 percent rise in the number of apps downloaded on both iOS and Android devices in the UAE in 2021.

Finance app downloads were up 55 percent and retail app downloads rose 24 percent year-on-year during White Friday (Dubai’s version of the Black Friday sales day elsewhere in the world) in November 2021.

“This year, the signs look positive for businesses looking to acquire more customers through their mobile devices. 

“However, as this space becomes more competitive, just providing an app will no longer be enough,” said UAE-based Samer Saad, regional manager for the Middle East at AppsFlyer.

“Organisations that leverage the power of mobile marketing to offer personalised experiences to their customers will rapidly pull ahead of the pack,” he concluded.

Set to launch in the UAE initially, Abu Sheikh says he has much bigger ambitions.

The community of apps he’s combined to create his ultra platform “are functioning in more than 50 countries around the world.”