Iraq’s Lezzoo raises seven-figure seed to build a super-app for the country

Ebril-based on-demand delivery startup Lezzoo has raised a seven-figure (USD) seed round, it told MENAbytes today. The round which is the largest for an Iraqi startup was led by New York & Baghdad-based frontier market investment firm Northern Gulf Partners and California-based Pay It Forward Venture Capital. Some angels from the United States and Latin America also took part in the round.

The funding announcement comes almost a year after Lezzoo graduated from Y Combinator. It was (and still is) the first (and only) Y Combinator-backed startup of Iraq.

Founded in early 2018 by Yadgar Merani, Rekar Botany & Ala Battal, Lezzoo has built super-app (using a three-sided marketplace model) that offers food, grocery, peer-to-peer, and medicine delivery, and on-demand laundry service across different cities of Northern Iraq. The startup that had started with food delivery has expanded its infrastructure around grocery delivery during the pandemic as a result of increased demand from the consumers.

The startup told us that they’re the only player to have partnered with Carrefour, allowing customers to make purchases from the hypermarket through their platform.

Yadgar Merani, the co-founder and CEO of Lezzoo, in a conversation with MENAbytes said that they’ve onboarded different types of offline sellers across various categories onto their platform to serve the consumers during the pandemic.

The startup that is focused on food, groceries, and medicine delivery currently also offline sellers using its platform to sell cosmetics, electronics, games, and toys. Lezzoo even has an on-demand nursing service that allows users to book home visits of nurses. All these services are available through one app. 

Yadgar told MENAbytes that they currently have over 700 sellers on their platform who are serving thousands of customers every month. Their food delivery business (which used to be the largest part of their business) was completely shut down for almost two months as the government had imposed a ban of food delivery, the CEO of Lezzoo explained in a conversation with MENAbytes, adding that the increase in grocery and other orders helped them maintain their numbers during these challenging times.

Lezzoo said that it currently processes close to 50,000 orders every month. It has recently also launched a mobile wallet called Lezzoo Pay that will allow users to pay for its services and buying different types of prepaid cards including iTunes, Google Play, Playstation, and local telecom operators. The startup aims to disrupt the cash-based society of the country by bringing digital transactions there. It aims to expand Lezzoo Pay to include different other things that the users would be able to pay for.

The Iraqi startup currently employs over 50 people including engineers, product managers, designers, and operations staff. It aims to use the latest funds to expand into Baghdad and across Iraq. The CEO of Lezzoo also said that they will explore the option of expanding to some other markets in the region and beyond but only after dominating the local market first.

Zaab Sethna, Partner at Northern Gulf Partners, in a statement, said, “Lezzoo has a forward-thinking, creative and dynamic team of founders and we are excited to back them. Iraq is a country with a young, connected, and increasingly sophisticated population. Incomes are rising but the barriers to entry remain high and this gives an advantage to home-grown firms.”

Raaid Hossain, General Partner of Pay It Forward Venture Capital, said, “We are proud and privileged to be able to back Lezzoo, a company that challenges the status quo by providing a best in class delivery experience for consumers, as well as drives the spirit of digital entrepreneurship in Iraq.”

“We believe that connected service industry, especially during times of restricted movement due to Covid-19, is paramount to staying safe, healthy, and feeling a sense of comfort. We truly believe Yadgar and the team are doing their part to make the world a better place,” he added.

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