Dubai: The car subscription portal invygo has signed up a further $1.9 million in Pre-Series A funding, as the Middle East’s mobility market keeps attracting a lot of investor interest.
The latest round had Signal Peak Ventures, JS Group, Wealth Well join invygo’s investor base, as well as the family offices of Saudi Arabia’s Dr. Faisal Al Kadi, Khalid AlKhudairi, Ahmed Alola. An existing investor, Knollwood, again participated in this round.
invygo allows users to ‘subscribe’ for their vehicle needs on a monthly basis, which gives them flexibility on usage. The digital mobility space in the Gulf now offers ride-hailing (through Careem and Uber), pay-by-the-minute use (like ekar) and subscription-based models such as the one from invygo.
Our product teams are accelerating the deployment of artificial intelligence and machine intelligence capabilities to transform our customer experience. By nurturing in-region technical talent, we are focused on building a world-class product that is shaped by a deep understanding of local market needs
It had been felt that after the COVID-19 impact, demand for much mobility solutions would wane because users would be wary about sharing vehicles.
“The automotive industry was going through a slowdown even prior to the pandemic - and legacy operating models wasn’t really helping growth,” said Eslam Hussein, co-founder and CEO. “The pandemic just forced a re-think to traditional car ownership, as well as costly leasing models where you are locked-in for the long term.
“I have seen the various challenges that emerge in the current value chain. In this on-demand era, customers need a new way to experience automobiles. With subscription, customers have complete flexibility and control, while dealers can move inventory very fast.
“With new dealers and partners coming on to the invygo platform, we see some positive trends for the industry. Our partnership with Careem in Saudi Arabia is also growing strongly as we equip young nationals with cars, so that they can play a role in the Kingdom’s ‘gig economy’.
“As such, subscription complements the ambitions of the broader industry, and we are excited to play a role in its recovery.”
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First with subscriptions
Founded in 2018, the company has struck deals with distributors and rental companies, including Enterprise (Al Jomeih), Budget Saudi and Al Jabr in Saudi Arabia, as well as National Car Rental (Al Tayer), Diamondlease (Al Habtoor), and Shift (A W Rostamani) in the UAE. Its users can subscribe to multiple auto brands, including super-premium ones such as Range Rover, BMW and Mercedes-Benz.
"Our customers get cars delivered directly from dealers which means these are low-mileage vehicles that are maintained extremely well," the CEO said. "In many cases, these cars are as good as brand new. Our customers can choose from 40,000 cars across 50 brands."
More gains on horizon
Primarily serving the UAE and Saudi markets, invygo’s CEO reckons that car subscription sector is still significantly underserved. “With this round of funding, we expect to grow in three key areas - new customers, new partners and the growth of our in-region engineering team,” said Hussein. “For us, this last one is extremely exciting as we want to nurture and build a pool of technical talent who understand the region and equip them with world-class skills. Engineering is a key priority for us and that is why our first hire was our head of engineering.
“Besides this, we also continue to explore opportunities in new markets. The MENAPT region has a low motorisation rate due to the cost of finance, high downpayments and overall cost of ownership. With subscription, we can change this and transform how customers in the region access cars.”
"Although pay-by-minute is an attractive option, the minutes are costly and the cars may come in all sorts of conditions from the previous driver," he said. "Most importantly, in the long run, the costs add up. That is why we don’t compete with that category because we want to be creating value for our customers first, by giving them a fixed fee.
"Monthly subscriptions remain flexible while still giving the user affordable mobility with their “own” car.
"By creating an extremely flexible subscription model, they have affordable access to vehicles. That is why despite recent macroeconomic challenges, we’ve seen continued growth of up to 5x over the past 16 months."