KSA-Based Zension Secures US$30 Million To Launch Zaam
This investment is the first of its kind in the region's business sector.
Khalid Saiduddin, co-founder and CEO of Zension Technologies. Courtesy of Zension Technologies.
UAE-born, KSA-headquartered after-sales services provider Zension Technologies has secured US$30 million in a Series A funding round led by Wa’ed Ventures, Saudi Aramco's $500 million venture capital arm.
The round also included contributions from Japan’s Sumitomo Corporation (its first investment of this kind in the region's business sector) and UAE-based Global Ventures.
Founded in Dubai in 2018 by Khalid Saiduddin and Nikos Anastasiadis, Zension, which has operations in the KSA and UAE markets, provides protection plans, extended warranties, and guaranteed buy-back services for mobile devices and consumer electronics.
The new investment is set to support Zension’s new vertical, Zaam, which aims to introduce a subscription-based model for personal tech devices, providing consumers buying products like smartphones, laptops, and headphones with an alternative to traditional purchase models. With Zaam, customers will be able to switch models, upgrade, and access repairs at lower costs than installment or buy-now-pay-later plans.
Customers will access Zaam through third-party distribution partners in the region starting January 2025, with Zension using five years of data and analytics to support Zaam’s pricing and service structure. By relying on real-time data and predictive analysis, Zaam ensures efficient device usage, with residual value passed to customers through reduced subscription costs.
In an interview with Inc. Arabia, Khalid Saiduddin, co-founder and CEO of Zension Technologies, elaborated on how the company’s new subscription model service will cater to aspiring consumer segments.
"Zaam is our new tech-on-a-subscription model that offers customers a totally new way of owning their personal tech devices," he said. "Rather than outright buying a piece of hardware like a smartphone, with Zaam, a customer essentially rents the product until they no longer like or need it. With innovation happening at such a fast pace now, many people want to have the latest model of phone or laptop as it hits the market and then upgrade to the latest model after one or two years, and definitely after three to four years. Zaam allows you to do this - swap your existing hardware for the latest models with no penalties for a very affordable monthly fee. We also fix your devices when they go wrong."
Saiduddin emphasized the growing appeal of subscription models among MENA consumers, noting a shift driven by convenience and cost-effectiveness. "We also know that over half of MENA consumers choose subscriptions as a payment option for convenience," he added. "With the COVID-19 pandemic giving rise to a strong digital payments' infrastructure and a large growth in e-commerce, more and more customers in the region are opting for subscriptions as a payment option. The main motivators being convenience and cost-effectiveness."
From a business perspective, Saiduddin highlighted Zension's use of advanced machine learning to refine customer experience and operational efficiency. "We have spent the last six years learning what customers want from their personal tech — our machine learning models can now accurately predict when someone will upgrade their device, which model they will choose, and also what type of repairs will likely be needed over time," he explained. "Because of this intelligence, we are able to offer the best rates to our customers by accurately predicting which devices are available on our platform. And since all devices come back into the Zaam ecosystem, we can pass the residual value of them back to the customer, as well as save them sitting in a drawer or worse still ending up in landfills.”
Saiduddin detailed how this approach accommodates fast-paced technological innovation and shifting consumer preferences while reducing electronic waste. "Customers save money, get to upgrade when they want, enjoy repairs when things go wrong, and help reduce e-waste," he said. "It’s a win-win for all."
Saiduddin also addressed potential cultural and behavioral barriers to adopting circular ownership models in the GCC region, where linear consumption has been the norm. He noted the region's rapid tech adoption and environmental consciousness as key enablers, saying, "GCC customers will often have more than one smartphone for instance, are early adopters of new tech, and in Saudi we see the fastest upgrade cycle in the world of between 12 and 18 months. Research has also shown that MENA customers are more likely than the rest of the world to choose products and services that offer a more environmentally friendly option, and are happy to pay more for them if they need to."
In terms of advice for other entrepreneurs wanting to follow his lead, Saiduddin said, "If you are planning to seek investment, then make sure you build something with a very strong product market fit, with strong unit economics, and one where you can show a clear path to profitability. Having a strong artificial intelligence (AI) strategy will also help with appealing to investors, even if it is not at the core of the model you are building."
He also highlighted the significance of constant consumer feedback and teamwork, saying, "I would also say test, test, test and test again. See what your consumers want from your business and be ready to continuously reiterate to give them what they need." With regards to talent, he said, "Focus on partnering with like-minded people, ones who share your values. You will need them to come on the journey with you, and keep the energy high, even when growth targets feel near impossible to meet."
