Keeping track of MENA's mega-projects

Ever dreamt of having Paul Graham and Peter Thiel on your seed round cap table?*

Now, imagine achieving that just six months after launching—without even using a pitch deck.

That's exactly what Arjun Mohan did in 2019.

He raised the then-largest seed round in MENA's history—$5.8 million—for Tenderd, a startup matching construction companies with idle equipment to those looking to rent.

How did he do it? Let's rewind. ⏮️

^{*(It’s probably the only table where you could get them to sit next to each-other)}

🏗️ The foundations

After graduating from university in Toronto, Arjun and two friends launched Eureka King in San Francisco - a platform to help publishers better target their audience.

But a family emergency brought him back to the UAE, where he saw a new opportunity.

The construction business his father was a partner in, in Dubai, was struggling.

A number of companies were renting out idle equipment for free cash flow.

Arjun thought there was a market gap and founded Tenderd, a platform connecting equipment owners with potential renters.

Y Combinator saw the potential.

They accepted Tenderd as only the second MENA-based startup into its famed accelerator, which has produced Airbnb, Reddit, Coinbase and Stripe to name only a few.

The timing was perfect.

Just three years prior, YC had backed EquipmentShare, a U.S. company with a similar model that quickly skyrocketed to a $1 billion valuation.

During his three months at Y Combinator, Arjun refined the product and then returned to Dubai to build the business, signing up equipment owners and potential renters.

When it came to fundraising after graduating, Arjun chose a bold strategy: skip the pitch deck.

Instead, he focused on in-person conversations to share insights organically and address investor concerns directly.

If investors insisted on a deck, he’d send over a brief email with bullet points.

By the end of 2018, his approach paid off—raising $5.6 million from a stellar lineup, which also included Paul Buchheit (Gmail creator), Justin Mateen (Tinder founder), Matt Mickiewicz (Flippa founder), BECO Capital, VentureSouq, SOMA, Dynamo, and Global Founders Capital.

🔄 The pivot

Originally a marketplace for heavy equipment rentals—like bulldozers, excavators, cranes, rollers, and trucks—Tenderd later pivoted to a SaaS platform offering end-to-end management of heavy machinery.

More on the why later.

How it works?

Tenderd's AI-powered telematics platforms unifies machine data on a single platform, automating operations, reducing carbon emissions, and cutting costs.

It allows businesses to:

• Monitor equipment location and usage

• Access detailed vehicle statistics

• Prevent breakdowns with predictive maintenance alerts

• Reduce fuel costs and CO2 emissions by tracking fuel usage

  ^{(Telematics: A method of tracking vehicles and equipment using GPS and on-board diagnostics (OBD) to show their movements on a digital map.)}

  

In essence, the solution removes guesswork entirely from the equation.

It's like a benevolent Big Brother, but focused exclusively on heavy equipment and machinery.

And the result is compelling:

• Greater efficiency ✅

• Reduced costs ✅

Today, Tenderd operates in the UAE and Saudi Arabia, and has collaborated with over 300 companies worldwide.

Their client list includes many of the region’s leading construction companies, such as Arabtec and Sobha Group.

And the YC-backed startup isn’t stopping there.

This summer, Tenderd raised $30 million in a Series A round led by A.P. Moller Holding, with participation from new investors Quadri Ventures and Saurya Prakash (a product leader at Stripe), alongside existing investors Wa’ed Ventures, Nakhla Ventures, SOMA Capital, and Liquid 2 Ventures.

Tenderd's new funding will help them scale globally and bring AI-driven solutions to construction, mining, and industrial sectors.

🪙🪙 Our two cents

We’re a fan of shifting away from the machine rental vertical to focus on SaaS.

While EquipmentShare has reached a $3.8 billion valuation and is preparing for an IPO, its model faces thin margins and significant logistical challenges due to the need for a physical presence across 160 locations in the U.S. to maintain its extensive network of rental operations.

Replicating that model in the MENA region presents challenges we, personally, would prefer to avoid, thank you very much.

But we can fully get on board with the pivot to a SaaS model:

1. Tenderd gains the scalability and flexibility of a subscription-based business, reducing the complexities of being a middleman in equipment rentals

2. Recurring revenue

3. It means that Tenderd is no longer confined to just the construction industry; say hello to logistics, marine, and energy 👋 

4. Diversification opens up new revenue streams and mitigates the risks associated with relying too heavily on a single market

The involvement of A.P. Moller Holding, a $32 billion investment company and parent to A.P. Moller - Maersk, further underscores the potential of Tenderd’s technology beyond construction.

A.P. Moller’s investment should further open doors for Tenderd into the logistics and port sectors, where efficient equipment management is also crucial.

The potential to tap into A.P. Moller’s expertise and network could be invaluable when it comes to unlocking new markets and driving growth.

And last, but certainly not least, there’s the sustainability angle.

The pitch is so simple and easy to grasp.

Tenderd’s platform offers real-time transparency, allowing clients to monitor carbon emissions, track fuel usage, and make informed decisions to reduce their carbon footprint.

Saving money and minimising environmental impact, it’s a pretty compelling value prop.

And while Tenderd might be leading the charge regionally, they’re absolutely by no means alone…

🔒 State of play

2024 has emerged as something of a breakout year for the MENA region’s contech startup ecosystem.

In H1 alone, $38.6 million has been raised across 4 deals.

During the entirety of 2023, only $3.3 million was raised across 8 transactions.

That’s a 1069.7% increase YoY so far.

Next week, we’ll tease out why that it is, what it means, and who the players to keep an eye on are.

In the meantime, if you have an opinion or hot take on the regional contech space, feel free to reply to this email, or shoot us a message over on LinkedIn - we’d love to get your thoughts!

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