Business Model
Revenue channels, plans priced in SAR, the revenue model at 1,000 paying merchants, variable costs, and the revenue impact of each module — all figures are modelling assumptions with stated confidence.
04 — Business model and revenue (SAR)
All figures are modelling assumptions, not promises, each with a confidence level. They are revisited after the first 50 merchants (Design Partners).
1. Revenue channels (by importance)
| # | Channel | Mechanism | Confidence |
|---|---|---|---|
| R1 | Monthly subscription | 3 plans, monthly / yearly billing through the PSP | Medium |
| R2 | Share of payments | 0.25%–0.5% on top of PSP fees (collected through the PSP partner programme / split, never by holding funds) | Low (depends on the PSP contract) |
| R3 | Ad management fee | 10% of spend or a monthly minimum | Low |
| R4 | Marketplace share | 25% of third-party add-on subscriptions; 100% of first-party add-ons | Low |
| R5 | BNPL / PSP referral commission | Merchant activation bounty from partner programmes | Low |
| R6 | Managed services | One-time fee for setting up the site / first campaign (through field agents) | Medium |
2. Plans (prices exclude 15% VAT)
| Plan | Code | SAR / month | Includes |
|---|---|---|---|
| Starter (بداية) | starter | 99 | One branch, a storefront on <slug>.mahalli.sa, payment links, simplified invoices, GBP connection, 20 AI posts / month |
| Growth (نمو) | growth | 249 | 3 branches, custom domain, full social studio + scheduling, campaign templates, AI review replies, weekly summary |
| Pro (احتراف) | pro | 499 | 10 branches, multi-account ads, advanced roles, API, priority support |
| Add-ons | — | 49–199 | Accounting, bookings, loyalty… from the Marketplace |
Yearly billing is priced at 10× the monthly price (two months free). Plans are defined in packages/payments and billed to the organization.
3. Revenue model at 1,000 paying merchants
| Channel | Assumption | SAR / month | Confidence |
|---|---|---|---|
| R1 subscription | Average 165 (60 / 30 / 10 mix) | 165,000 | Medium |
| R2 payments | 60% use payments, GMV 25,000 / merchant, 0.3% | 45,000 | Low |
| R3 ads | 20% spend 1,500 / month, 10% fee | 30,000 | Low |
| R4 add-ons | 30% with one add-on averaging 99, weighted 60% share | 18,000 | Low |
| R6 services | 40 new merchants / month × 500 | 20,000 | Medium |
| Total | ≈ 278,000 | Low–medium |
- At 5,000 merchants: ≈ 1.3–1.5 million SAR / month (low confidence; linear scaling is not guaranteed).
- Target ARPU ≥ 250 SAR / month across channels; monthly churn ≤ 3% (Saudi SMEs historically churn heavily; the domain, invoices, and customer records are the stickiness levers).
4. Main variable costs (per merchant / month, estimated)
| Item | SAR | Note |
|---|---|---|
| Cloudflare (R2 / SaaS hostnames / edge) and app hosting | 2–5 | Each custom hostname has a per-domain cost; hosting depends on Q12 |
| Managed Postgres | 3–8 | Depends on provider and region |
| Claude API (through AI Gateway with caching) | 5–20 | Governed by per-plan quotas |
| SMS / WhatsApp | 3–10 | OTP + notifications |
| Support | 10–25 | Self-serve + WhatsApp |
| Total | ≈ 25–70 | Target gross margin ≥ 70% |
5. Revenue impact per module (for prioritisation)
| Module | Channel | Impact, SAR / month at 1,000 merchants | Confidence |
|---|---|---|---|
| payments | R1 + R2 + R5 | 60–90k | Medium |
| sites (+ custom domain) | R1 (drives the upgrade to Growth) | 40–60k | Medium |
| presence | R1 (retention) | Indirect | Medium |
| social | R1 (upgrade) | 20–30k | Low |
| ads | R3 | 30k+ | Low |
| marketplace / accounting | R4 | 18k+ | Low |
Prioritisation: payments and sites first (wedge + upgrade), then presence / social (retention), then ads and marketplace (expansion).
Domain Model
The tenant-scoped entity model — core, catalog and customers, money, presence and content, ads, sites, platform — and the fixed rules every table obeys.
Compliance and Regulation
Saudi regulatory map for Mahalli — ZATCA e-invoicing and VAT, SAMA and BNPL, PDPL, commercial registration, e-commerce, messaging, advertising, sensitive sectors, and security — plus the decisions that must be made before code.