Mahmoud Bartawi raised $ 500,000 for his startup Mealzap, which launched last month. Here’s how …
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“Don’t be afraid of being rejected by investors,” is the message from the Emirati serial entrepreneur Mahmoud Bartawi to other start-ups interested in raising funds to set up and grow their business. Bartawi raised $ 500,000 (Dh 1.8 million) for his startup Mealzap, which started in July 2021.
“In the fundraising phase, ‘no’ is the standard answer most startups get, but that doesn’t mean their idea isn’t working. The idea may require fine-tuning and support from like-minded people with the right skills and expertise, ”he said.
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Bartawi’s recently launched Mealzap app connects a community of healthy eaters with personal trainers who create meal plans from dishes from restaurants that focus on healthy eating. This is how he went about developing Mealzap.
As a serial entrepreneur, tell us how difficult it is to raise funds?
“Even before fundraising, it’s crucial to believe in the idea itself. It’s not easy with fundraising as there will be multiple rejections. But neither is it impossible. Investors understand that it is not always possible for an entrepreneur to have an idea, team, and money to start a business and grow.
“If the entrepreneur’s vision is strong and he can bring together people with a credible track record and core competencies, who believe in the idea and are ready to become co-founders, then fundraising is two steps closer. So if an investor asks the entrepreneur what happens when people leave, they have a legitimate explanation that the team members are co-founders of the company. Even if these co-founders may have failed before, they have also learned what makes them more experienced.
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“Finally, when the investor understands that the entrepreneur is all in with a vision, time, effort, people and some money, they are more likely to part with their own money. However, I repeat that it is always important to remember that fundraising is more likely to be a refusal, so entrepreneurs should be willing to face it and keep improving their vision so that it finally works. For example, the current version of the Mealzap is only a small percentage of what I imagine one day and our investors are aware of that. “
How much does it cost to make an app like Mealzap?
“Creating a native app for Android and iOS can cost between 80,000 and 250,000 US dollars (293,850-918,250 Dh). This is just a “Minimum Viable Product” (MVP) to prove the necessity of such an app on the market.
What is a “Minimum Viable Product” or MVP?
A minimum viable product is a version of a product with just enough features to be used by early customers who can then provide feedback for future product developments. A focus on publishing an MVP means developers can potentially avoid tedious and unnecessary work.
“The first year of an app’s life is generally about understanding the customer and the“ product-market fit ”(see below). After starting an MVP, the cost of constantly fixing glitches based on customer feedback, adding new features, and upgrades is also quite expensive. However, when a developer works with a business owner, the cost of developing an app is lower.
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What is a product market fit?
The term Product-Market Fit means that a certain product meets a strong market demand. This is usually the first and crucial step in building a successful business because it is through this product that the company meets early adopters, gathers feedback, and measures interest.
Did you receive any additional support?
“Yes, I have received support from the UAE government. We spent Dh6,500 to license Mealzap under the Hamdan Innovation Incubator program along with two visas. In addition, I spent Dh13,000 to set up a holding company with Abu Dhabi Global Market (ADGM) to distribute shares to investors. “
What are your current expenses?
“In my business, salaries are the biggest running expense. We pay a monthly salary of 35,000 US dollars (128,550 Dh) to five developers and want to increase. Then we have our COO, CFO, CTO and myself as well as a part-time accountant and a customer service representative.
“Since it’s easy to find developers from low-cost regions these days, we’re thinking about increasing the number of developers at the same cost. In addition to the salaries, we spend 7,000 to 10,000 Dh per month on brand and marketing activities. “
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How important is cash flow management for startups? How often should it be monitored?
“Understanding and managing cash flow is perhaps the most important thing that can make or break a business. We look at our cash flow on a weekly basis which helps in estimating the runway. When raising funds, we looked at the runway for 12 to 18 months.
What is runway in terms of business expenses?
“Runway” refers to the time a company has before it runs out of money. If your net burn rate is Dh10,000 per month and you have Dh100,000 in the bank, you have 10 months to generate positive cash flow. When calculating your runway, it is important to use your net burn rate.
“However, growth requires capital and the runway is getting shorter because we want to grow faster. We plan to expand into Saudi Arabia and Kuwait by the first quarter of 2022. And for this it is my main task as CEO to raise money and provide resources in order to achieve the defined KPIs (Key Performance Indicators) for the next five years. “
What message would you give other start-ups?
“Don’t hesitate to share an idea, as this is the only way to motivate people to get on board, including co-founders, team members and investors. And this is the only way to turn an idea into reality. “
Before the introduction of Mealzap, Mahmoud Bartawi co-founded the healthy food concepts Under500 and Gymfood.
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