The news:
- DXwand, an AI startup operating out of Cairo, Egypt, and Dubai, United Arab Emirates (UAE), has received $4 million in Series A funding to expand further in the Middle East and North Africa (MENA) region.
- Two Middle East investors — Shorooq Partners in UAE and Algebra Ventures in Egypt — led the round, while Dubai Future District Fund, an existing investor, also participated.
- The Series A capital injection will also expedite the company’s research and development efforts in knowledge mining, generative AI, and omnichannel conversational AI.
In 2018, Ahmed Mahmoud (CEO) and Mahmoud Gomaa (Growth Lead) cofounded DXwand to help small businesses with a custom customer-focused chatbot to drive sales on social media platforms. The company hit the ground running with an initial seed funding of $150,000 from angel investors in Qatar and Egypt.
Mahmoud worked for Microsoft before starting the company. While working for the tech behemoth, he noticed that conversational AI and other AI technologies were less developed in the Middle East than in the West.
The reason was simple: Silicon Valley didn’t develop AI solutions specifically for Arabic or other MENA languages. Mahmoud soon resigned from Microsoft to establish DXwand.
Mahmoud says that at first, DXwand's main goal was to tackle the difficult task of developing an AI system that handles dialects of Arabic. After a period of success, the company realised that it needed to modify its business models to adapt its product to the market and achieve profitability.
So, in 2021, the AI startup pivoted from targeting small businesses to corporations and enterprises, focusing its offerings towards knowledge mining and retrieval augmented generation (RAG) domains.
The company’s AI-powered software now automates text and voice conversations between businesses, their employees, clients, and user-facing government services. This multilingual function is available on platforms like call centres, Facebook Messenger, WhatsApp, SMS, and websites.
Between 2021 and 2022, DXwand secured additional investments to scale this solution in the MENA region, including a $1 million pre-Series A fund from the Dubai Future District Fund and a $1.3 million seed extension from SOSV and other investors.
Today, DXwand asserts to be profitable and has assisted over 200 clients in growing their businesses, with its chatbot currently serving over 40 clients throughout the MENA region. Its clients come from various sectors, including healthcare, e-commerce, fintech, telecom, government, and legal.
Per its website, the AI startup facilitates over five million monthly conversations and charges a yearly subscription between $50,000 and $400,000. The CEO also revealed that DXwand grossed more than $5 million in annual recurring revenues in 2023, highlighting the company’s 2x year-over-year growth.
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