Dubai-based retailer Awok ceases operations less than a year following its $30 million Series A funding round.
In a surprising turn of events, Dubai-based ecommerce platform Awok has announced its permanent shutdown. This news marks one of the biggest failures for a startup in the Middle East & North Africa (MENA) region, as the company had raised a significant sum of $30 million in one of the largest investment rounds for an ecommerce startup in the region.
Founded in 2013 by Ulugbek Yuldashev, Awok offered over 70,000 products across 30 plus categories, focusing on low to mid-income segments in the United Arab Emirates and Saudi Arabia. However, the company's downfall began to surface in the early months of 2020, with employees not receiving their salaries since January and many leaving the company without receiving their end-of-service benefits.
The shutdown was first hinted in a Reddit thread and a series of tweets, with customers reporting that their orders were not being fulfilled. This was further corroborated by online reviews on Trust Pilot. Some vendors of the company were also left unpaid, adding to the financial woes of Awok.
The current global situation is cited as the reason for Awok's shutdown, although employees have accused the company's leadership of poor financial management, making poor decisions, and taking unnecessary risks. Despite efforts to reach out to Awok's founder and investors for more information, these attempts have been unsuccessful.
Interestingly, another startup in the region, Fetchr, was on the brink of bankruptcy last year but was saved by $10 million in emergency financing. Recently, Fetchr has received $15 million in fresh capital, highlighting the contrast between successful and failed startups in the MENA region.
This failure serves as a reminder that raising money is not the success of a startup. It is crucial for startups to manage their funds wisely and make prudent decisions to ensure their long-term sustainability.
Zubair Naeem Paracha, the founder of our xA tech and a startup enthusiast based in Lahore, Pakistan, is also building Qraar, a career discovery and development platform for millennials in MENA. His insights into the startup ecosystem could provide valuable lessons for aspiring entrepreneurs in the region.
As Awok's story unfolds, it serves as a cautionary tale for startups in the MENA region, emphasising the importance of financial responsibility and strategic decision-making in the face of adversity.
