From Startup To Scaleup: Takeaways From The Souqalmal Growth Journey
Before you think about scaling your business, you have to make sure your business is sitting on a solid foundation and is ready to be scaled up.
Scaleup is a fairly new concept that’s been doing the rounds in tech business circles, and for good reason. Given the high failure rate of startups the world over, coining the term “scaleup” has helped differentiate scalable and sustainable businesses from the rest of the pack. To simplify further, you could think of scaleups as “established” startups.
So, when does a startup become a scaleup? The transition doesn’t happen overnight. A company qualifies as a scaleup after it moves past early-stage barriers, demonstrates a track record of high growth, and shows potential for long-term success. The scale-up stage is where it’s trying to unlock new growth opportunities, access new markets, expand its team, and build upon its core strengths. Unlike most new startups, scaleups do things a bit differently.
Case in point: Souqalmal. com. We’ve successfully completed seven years of running the UAE’s most trusted personal finance and insurance aggregator. Taking a page from our own book, we define how a business can prepare to scale up and execute its vision successfully.
Is your business viable for scaling?
Here’s the harsh truth: for every remarkable success story, there are countless others that crash and burn. Unfortunately, many startups simply fizzle out before they’ve had a chance to make a ripple in the market. Reasons range from running out of cash, product-market misalignment, an inefficient team, and many more. Before you think about scaling your business, you have to make sure your business is sitting on a solid foundation and is ready to be scaled up.
Ask yourself the following questions: what is your ultimate goal for the business? Do you understand your core product/service strengths? Which marketing channels get you the highest ROI? Do you have a great team to help execute your ideas? How are you going to access the cash you need to scale up? As an entrepreneur, you have to fully understand the economics of your business, before you decide to scale up. Your focus has to shift from simply selling, to optimizing as well.
And just as important it is to understand whether your business can be scaled, it is equally important to get the timing right. Premature scaling can kill your startup. You have to ensure that your scaling efforts are in sync with the rest of the operation. Consider all aspects –the product, the customer, the team, and the funding– to establish that you’re not diving in too early.
Since launching Souqalmal. com as a personal finance aggregator in 2012, we’ve always been on the lookout to expand our services and tap into new markets. We took a big leap when we launched our insurance aggregator business in June 2016. And in hindsight, this was the best decision for our business. We've grown our insurance business by 800% in the last year alone. And our focus remains on building efficiencies as we grow. By optimizing our service delivery and marketing efforts, we’ve managed to slash our customer acquisition cost by 80%.
Securing the funding to actually scale-up
Startup funding looks quite different from scaleup funding. Early-stage funding constitutes of the seed and Series A rounds. At the seed funding stage, investors are essentially backing an idea, a proof of concept, and the founders. Next comes the Series A round where you’ll have to prove that you have a working business model that can be scaled.
After that comes the Series B round, which is all about scaling. With an established customer base, revenue stream, and management team, you’re now looking to scale up– expand to a new market, launch new verticals, and grow your team.
Souqalmal.com closed its Series B round just over a year back and raised US$10 million from a great team of not just investors, but strategic investment partners. With Saudi Arabia-based Riyad TAQNIA Fund (RTF) being our lead investor, we’re all set to expand our online presence in the Kingdom. Our international strategic partner, GoCompare, allows us to tap into the tech know-how and best practices in the financial aggregator business.
All in all, we’ve been busy expanding the scope of our business, launching new business lines, improving our user experience, and making inroads into new markets. We've launched three new insurance verticals over the last year- travel, yacht, and bike insurance, and are already working on adding more comparison services to this growing list.
We’re on track to building a successful business, one that’s built to last. Whether it’s a new service, a new geographic expansion, or a new project that’s set to shake things up in the industry– there’s always something exciting brewing at Souqalmal.
Ambareen Musa is the CEO and founder of Souqalmal.com. Before founding Souqalmal.com in 2012, Musa set up the consulting arm of MasterCard Middle East and Africa. Previously Musa held had various roles including marketing, financial literacy, customer advocacy and e- commerce for GE’s financial arm, GE Money. She led the first online financial literacy initiative in the U.K., Moneybasics.co.uk., later relocating to the Middle East in 2008 where she consulted for Bain & Company Middle East, focusing on financial services projects such as growth strategies for banks in the region.