Dubai: The region’s leading online marketplace JadoPado has sold a 14.8 per cent stake for Dh14.69 million to an investor group led by Beco Capital, the venture capital firm. The deal effectively values JadoPado at Dh102 million, and the new funds will come in handy to tap expansion opportunities in the region and beyond. This is also the first “external financing” done in the ecommerce portal, according to a top official.

It was early this year that JadoPado transitioned itself from a portal where it was doing all the sourcing and selling of merchandise into a fully-fledged online marketplace where other businesses could put up their products and hope to reach a more spread out consumer base.

This meant that the number of products available via JadoPado shot up from 8,000 SKUs (stock keeping units) to 60,000 SKUs, while the number of sellers swelled to 2,500. “The traffic generated by the portal has tripled since then and I would say it was the beginning of building up scale from where we were last year,” said Omar Kassim, the JadoPado CEO. “Just two months ago, one of our sellers was shipping a delivery to Alaska; we have a strong base of sellers out of Hong Kong.

“The ambition of the portal is to go global.”

This is where the new funding can play a part. Currently, the UAE accounts for 45 per cent of the traffic, followed by Saudi Arabia. “The evolution from being a pure e-retailer into a marketplace was absolutely necessary,” said Kassim. “It was necessary to push into a new direction to create the step change that the business needed.

“The debates will continue as to whether we are a ecommerce business or a tech entity; whether it’s logistics that we do or retail. The way I see it is part of the natural evolution that JadoPado needs to go through.”

The process to bring in outside investors had been on for some time. Discussions were held with several prospective ones, “but the challenge always remained to get the right partner on board,” said Kassim. “Beco Capital’s investment is indicative of our strong market positioning.”

Beco Capital has had prior investments in local tech startups, including Careem, the ride-hailing service, and Propertyfinder.

“With the increase in consumer traffic and merchant acquisition, JadoPado is changing how businesses in the region are selling to consumers and how consumers are buying products and services,” said Dany Farha, CEO of Beco Capital. “JadoPado has created a disruptive marketplace that will bring about a dramatic transformation in the sector.”

On whether more regulatory oversight of ecommerce businesses, including imposing a tax regime, could be a drag on future prospects, Kassim said: “I haven’t heard of any rumours regarding taxing ecommerce. For those brick-and-mortar retailers who still insist on a level playing field, they have to realise that consumers in the UAE and Saudi Arabia are at the cutting edge of ecommerce trends, and not just within the region. These consumers are not playing catch up.

“Brick-and-mortar retailers will be better off introspecting what it means to be one in such an environment and change their ways accordingly. This will help better than keep talking about a level playing field.”

Interestingly, JadoPado sees possibilities for itself as brick-and-mortar and online come together for omni-channel possibilities. “The challenge for any retailer remains customer acquisition,” said Kassim. “JadoPado has done all these things and know what the solutions are. We could play a part in the newly emerging channel mix, allowing retailers to go to market quickly and test the waters before they throw millions of dollars towards change.

“It could be a good complement to our own online marketplace.”