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Dubai’s Awok shuts down a year after raising USD 30 million Series A round

The startup’s case is a cautionary tale for anyone who equates large investment rounds with success.

Ulugbek Yuldashev, Awok's founder. Courtesy of Awok via MENAbytes.

Dubai-based e-commerce platform Awok has shut down a little over a year after raising USD 30 million in one of the largest investment rounds for an e-commerce startup in the region. The development was first hinted in a Reddit thread started by a Dubai resident on Saturday as well as earlier on Tuesday by Omar Kassim in a series of tweets. Awok has just confirmed that it has shut down, according to a statement posted on its homepage.

“Awok’s journey as a mass-market e-commerce player has unfortunately come to an end and the company has ceased operations,” reads the statement.

Founded in 2013 by Ulugbek Yuldashev, Awok was an e-commerce platform focusing on low- to mid-income segments in the United Arab Emirates and Saudi Arabia through the sale of “affordable” products that were priced as low as AED 1 (USD 0.30). Ulugbek had started Awok with USD 30,000 of his savings and three employees. He had largely bootstrapped the company until April 2019, when Awok raised USD 30 million in its first external investment round.

Awok offered over 70,000 products across more than 30 categories and had its own fulfillment center and logistics network.

The round was co-led by StonePine Ace Partners—which is a joint venture between two private equity firms, Dubai-based StonePine Capital Partners and Geneva-headquartered Ace & Company—and Al-Faisaliah Ventures, the VC arm of one of the leading Saudi conglomerates, Al-Faisaliah Group. Endeavor Catalyst also participated in the round.

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MENAbytes has spoken with multiple employees at Awok, all of whom have confirmed that the company has been in crisis since the start of 2020. All of them told MENAbytes that the employees weren’t paid salaries since January and most left the company in March. The staff members also said that the employees who left this year did not receive their end of service benefits.

Some of the company’s vendors are still owed their dues, Awok’s former employees said. The online reviews of Awok on Trust Pilot suggest that the company was not fulfilling the orders of customers even after receiving payments.

“My order was auto-canceled on July 4 but until now my money has not been refunded despite numerous calls and follow-ups. Please refund my money,” reads a one-star review posted about Awok on Trust Pilot on August 4. There are other similar reviews highlighting the same issues.

In the statement posted on its website, Awok cited the “current global situation” as the reason for shutting down. It said that the company had no choice but to shut down the platform for good.

The employees who spoke to MENAbytes before Awok’s statement was published on its website had blamed company’s leadership for the failure. They said the company did not properly manage the funds that it had raised, made some poor decisions, and took too many unnecessary risks.

Awok’s fall is one of the biggest failures for a startup in the Middle East and North Africa. There are very few startups in the region that have raised hefty sums only to go bust. Fetchr was on the verge of bankruptcy last year, but was saved by USD 10 million in emergency financing. It has been trying to turn things around and has just received USD 15 million in fresh capital.

Awok’s failure serves as a reminder to everyone in the ecosystem who equates raising money with success. That is not the case and Awok’s case is proof.

This article first appeared in MENAbytes.