One of them is on the list of the most influential in the Middle East.. How did two young Egyptians lead a startup company with investments worth 40 million dollars?

CAIRO

- Despite dozens of startups in Egypt and the Arab region, there appeared to be a digitization gap in the furniture, home and living category, so Egyptian young man Ibrahim Mohamed decided to use his previous experiences, in the field of e-commerce, to break into this market, which exceeds $ 60 billion in the Middle East and North Africa .

Ibrahim and his young partner, Mahmoud Ibrahim, set out to found HOMZMART in 2019, the first Egyptian online e-commerce platform focused on the furniture and household goods market.

In just 3 years, the Homesmart platform succeeded in becoming one of the main players in the furniture selling market in Egypt, the largest electronically, and it managed through several financing rounds to raise $40 million, and it has more than one million digital users, and its sales volume may double annually, and it has expanded in new markets.

The name of the co-founder and COO Ibrahim quickly rose to a prominent place in the Forbes list of promising young people in the Middle East for the year 2022, which includes 35 entrepreneurs, innovators and athletes under the age of 30.

Challenges and opportunities

Establishing an e-commerce platform in furniture and home appliances was a huge challenge for the young entrepreneurs, as traditional stores dominate the furniture industry in Egypt, and the transportation of heavy weight products is also a challenge for the supply chain.

However, the challenges did not dampen the determination of the two founders, who previously worked at the e-commerce company “Jumia” and with self-finance, launched the Homesmart platform in the beginning of 2020, to begin its work in connecting manufacturers and sellers of furniture and household goods with end consumers.

The furniture market in the Middle East and North Africa was unrivaled on the Internet, while there were 25 million potential customers waiting to be served, which was the main motivation for launching Homesmart, Ibrahim told Forbes.

The boldness of the idea and the enthusiasm of the entrepreneurs attracted the interest of investors, as the startup succeeded in raising $1.3 million in its first seed funding round in February 2020, in which China’s MSA Capital, the Oman Technology Fund and Equitrust participated. (Equitrust) is the investment arm of the Choueiri Group, along with "500 Startups" and a group of investors.

The platform has directed the new funding to increase its staff and develop its technological infrastructure.

Corona Scholarship

In the first months of 2020, the world faced the Corona pandemic, and while the losses of the global economy were heavy as a result of the closure and precautionary measures, the e-commerce sector, on the contrary, was booming and becoming increasingly important.

In Egypt, the interest in online shopping was growing rapidly, and with the Corona pandemic, a large part of consumers switched to online shopping, which contributed to boosting the growth of Homesmart significantly.

The fledgling platform made it easier for customers to discover and buy furniture, gave them a broader base to choose from thousands of units and hundreds of sellers, and gave them the option to refuse to pick up a product from the courier if it didn't match the description or was in poor condition.

While Homesmart provides sellers and manufacturers a powerful window to reach customers, without having to incur the cost of private showrooms for their products.

The platform presented 7 main sections under which sub-sections of its products fall: Furniture, Storage Units, Office Furniture, Decoration, Kitchen, Home Appliances and Sports Equipment.

In March 2020, there were about 10,000 products on the electronic platform, offered by more than 80 sellers, to double this number staggeringly during the following months, to reach in May 2021 to about 55 thousand products, and the platform's sales have grown more than 30 times within 12 months.

Homesmart launched in October 2021 its investment arm in the field of shipping and logistics (Homsmart)

flourishing and expanding

In conjunction with the increased demand on the platform, the young team leading Homesmart succeeded in attracting more investors, and in its first investment round in May 2021, it was able to raise funds amounting to $ 15 million, led by investors, most notably “MS Capital” and the Saudi-Emirati company “Nawaat.” Nuwa Capital.

The new investments helped Ibrahim, Mahmoud and their team to move forward with their ambitious expansion plans in the region, implementing a strategy based on integrating the entire value chain.

The young team thought that it was necessary to take a large step to facilitate the transportation of furniture to customers, so that in October 2021 the company launched an investment arm in the field of shipping and logistics.

Before the end of 2021, during which the local operations of Homesmart tripled, the Egyptian company set its feet in the Saudi market, with lists of more than 45,000 products, to become a key player in a market valued at about $15 billion, and growing at a rate of 10% annually.

The company concluded last year by ranking 48th in the Forbes list of the 50 most funded companies in the Middle East and North Africa for the year 2021.

Homesmart opened smart showrooms in Cairo to contribute to enriching users' experience (Reuters)

ambitious plans

The Homesmart team entered the new year 2022 with more ambitions and new plans for development, while the number of users of the platform was steadily increasing, ranging between 100,000 and 200,000 users.

In order to provide a more advanced and enjoyable experience for its customers, the Egyptian furniture platform executed last March an interesting acquisition of the German company MockUp Studio, which specializes in interior design for homes.

Company officials explained at the time that the deal aims to take advantage of the special artificial intelligence technology in “Mok App Studio” to measure and design the space automatically, to give users the ability to visualize pieces of furniture and finishes in their homes in a few steps before proceeding with the purchase process.

The startup continued to develop its operations, and with great enthusiasm, Homesmart announced in May 2022 the start of import and export operations between its two branches in Egypt and Saudi Arabia, a move that Ibrahim described as a milestone for Homesmart and regional trade.

And in the middle of this year, the company began opening smart showrooms east and west of Greater Cairo, which it said contribute to enriching the users' experience by previewing products, before making an actual online purchase.

The development of Homesmart’s operations contributed to the success of its second financing round astonishingly successful, to obtain new financing of $ 23 million, with the participation of the Saudi Investment Fund (STV) along with a group of existing investors, according to what the platform announced in early August, bringing the total amount The company raised about $40 million.

And last September, Homesmart celebrated the arrival of the number of users of the platform to one million users, served by a team of more than 550 employees, through a partnership with a network of two thousand suppliers of manufacturers and artisans, providing nearly 250 thousand diverse products.