By Alvin R. Cabral Khaleej Times, Dubai, United Arab Emirates
WWR Article Summary (tl;dr) As defined by "Investopedia", angel investors are those who invest in startups -- usually family and friends -- whose capital is used as a one-time investment to help a business propel or support it in its difficult early stages.
Startups are everywhere. A good number of them even have ideas we may have not seen coming (that we wished we had beat them to the draw for it). But as any company practically starting from scratch, there's one essential thing they need to take their ideas to greater heights: funding.
Don't have enough seed money? Try pulling the heartstrings of angel investors. "We live in interesting times, as the Chinese proverb goes," Saad Khan, chief executive of Whoopey.com, told Khaleej Times.
"The UAE's entrepreneurial ecosystem is poised to revolutionise in the coming years. So more power can be added to it if entrepreneurs are focused and innovate to create niche and differentiating business models."
The same kind of focus and innovation that would attract these wingless-but-still-more-than-happy-to-help angels. As defined by Investopedia, angel investors are those who invest in startups -- usually family and friends -- whose capital is used as a one-time investment to help a business propel or support it in its difficult early stages.
They also provide more favourable terms compared to other lenders, since they usually invest in the entrepreneur starting the business rather than its viability. In short, angel investors -- the opposite of venture capitalists -- are more focused on helping startups take their first steps.
Whoopey.com, an e-commerce platform based in Dubai, raised $1.5 million (Dh5.51 million) from international angel investors in an initial round of funding. After two years, Khan says, it plans to seek up to $5 million to spruce up its resources and technologies, as well as build a call centre base in India.
Khan listed three things that made him take the entrepreneurship plunge: a deep-rooted understanding of the supply chain, brand management, retail and consumer behaviour, having been at the helm of Redington Gulf's corporate and retail division; the idea that the GCC needs a powerful e-commerce platform that addresses execution and post-sale services; and the identification of the wider gap in the market, such as plugging consumer electronic needs of lower-tier markets that have limited or no online presence in the region.
The last one, Khan believes, is a win-win situation for both seller and customer. "I believe that there's tremendous scope when you provide genuine products to consumers as quickly as possible, ensure post-sale relationship-building customer engagement and taking the initiative to bring new cost-effective brands to the market," he adds.
Khan says that the company is eyeing a number of international brands that are not present in the GCC, which will be launched over a period of time.
'The more, the merrier' Incorporated in May 2016, Whoopey.com's approach is "slightly different" from others.
"We are not just a marketplace that lists products; we provide end-to-end digital marketing solutions to the brands and products that are listed on the website," Khan explains. "This helps create a unique customer base and loyalty."
And he doesn't mind the seemingly crowded e-commerce arena: "There is enough scope for everyone as the market is still very much untapped. It's simple: the more, the merrier." The company also started its operations in Saudi Arabia and Qatar last year. By the first quarter of 2017, it plans to beef up its presence across the GCC.
Also on its crosshairs are plans to launch a mobile app and an Arabic website in the coming months -- areas that are very much useful in the UAE, widely regarded as a tech-savvy place. "Over our first year, we've gotten better at encouraging customers to give Whoopey.com a go," Khan says.
"Our focus on building a sound platform, good distribution network and strategic tie-ups with brands on an exclusive basis has helped us sustain and thrive in the UAE's competitive market."
He points out that the Middle East's e-commerce industry is set to revolutionise, evolving and transforming over time to meet the "whims and needs of the modern-day customer".
Khan even pays tribute to Noon.com, the e-commerce venture of Emaar Properties chairman Mohamed Alabbar, which proves that the "fast-growing trend [of e-commerce] is clearly reflected in the investments being made to give a major push to the sector".
Quoting figures from Euromonitor International's 2016 report, Khan says the UAE consumer electronics industry is expected to be valued at Dh15.7 billion by 2020, a 22.7 per cent increase from 2015's Dh12.8 billion. And with the advent of the wider availability of affordable technology, Khan believes "unmatched deals that satisfy customer cravings of a wider audience" -- from all walks of life -- will always be a come-on.
And for good measure, the portal also has its very own "Salary Spree Sale" at the end of each month, giving customers the chance to earn cash-back up to Dh3,000 on consumer electronics.
On all digital fronts Social-media engagement, as always, is another integral part of the company's customer-relationship-building strategy; Whoopey.com uses Facebook, Instagram, WhatsApp and Twitter to ensure faster shipping, better after-sales services and customer satisfaction.
"We aim to innovate around the customer to create better engagement, utilising multiple platforms and integrating social media to connect with the new generation of buyers," adds Adveta Dwivedi, Whoopey.com's digital strategist.
"Going forward, we see our platform creating a lot of new value that didn't exist in the digital space for our listed brands and products."
Khan sees an encouraging picture not just for Whoopey.com, but for the entire e-commerce market as well. And with the successes of startups like them, he hopes more people will be willing to help others who want to make their mark in the entrepreneurship space.
"First of all, we were looking to invest in the fast-growing sector of online retailing in the Middle East. For this, we were looking at startups where the entrepreneur was young, dynamic and experienced in his field," one of Whoopey.com's angel investors said, who requested anonymity.
"We found Saad to be just the correct fit. Secondly, we liked the approach of the business model, where it is being projected as a niche player within the online space with service being a huge differentiator. This would give it the resilience required to be sustainable in the long run when competition beefs up."
Added a fellow angel investor: "There is a huge potential of growth for Whoopey.com both vertically as well as horizontally. Over the years, Saad has developed several strong bonds with existing suppliers in the IT and tech industry."
"He continues to forge new relationships with suppliers both within the industry as well as those outside the purview of the core business, e.g. fashion, accessories, etc. This will give Whoopey.com a bigger range of products to sell. In addition, the business is very scaleable, and is currently well-established in the UAE, Qatar and Saudi Arabia, with the rest of the GCC to follow."
And Khan has some more words of wisdom. "If you have the right model that can secure the right funding and the right partnerships", you will be able to succeed, he advises. The company, he points out, achieved a milestone in just three months of operations: surpassing the Dh1 million sales mark during that period.
"Overall, our attitude towards business is simple: we have to improvise, evaluate and get better each day," Khan says. "Keep moving forward with a focused approach."