One of tech’s proudest themes, right now, is how it’s helping a world that was suddenly hit by an unforgiving pandemic adjust to new realities. From the workplace to everyday life, tech’s role in helping the today individual thrive now goes beyond prolonged phone calls, fancy back-ends, and busy electronic mailboxes. Remote work, cloud-based services, and most importantly, online commerce, have gone from futuristic to status quo in a dash.
In the eCommerce sector, for instance, companies—and even startups—that are enabling today/emerging consumers to purchase stuff online are witnessing a boom. While the heat already exists in markets like the United States, Europe, and perhaps Southeast Asia, Sub-Saharan African eCommerce remains in a formative yet rapidly developing stage.
However, in North Africa—as well as the Middle East—the story pans out much faster, and the developments in the market are happening in quicker succession. For one, existing and newfangled startups (some of which were founded during the pandemic) in North Africa made their biggest appearance on Y Combinator this year. YC’s most recent batch features the largest collection of eCommerce firms in the region.
As one might expect, Egypt—the world’s most populous Arab nation and one of the MENA region’s leading economies—is ground zero for relatively all things building and scaling. Startups like Flextock, Homzart, Bosta, ShipBlu recently raised to operate in the eCommerce fulfillment/logistics sector, some with the YC tag, some without.
On the heels of the impending eCommerce boom in Egypt comes the rapid rise of food and grocery delivery. This month alone, a handful of early-stage companies vying for a slice of the foodtech pie in not only Egypt but also the Middle East have emerged with sizable VC fundraisers.
As one of the most significant funding rounds in the market, yet, Breadfast—an online grocery delivery company that wants to build the “Gopuff for Africa”—bagged USD 26 Mn in a pre-Series A that brought the startup’s total funding to over USD 30 Mn. While Breadfast launched shop back in 2017, a younger player like RabbitMart (or, simply, Rabbit) emerged from 5 months of stealth with a pre-seed of USD 11 Mn in the goody bag.
Similarly, Appetito—an on-demand grocery delivery startup that was launched in 2017— secured USD 2 Mn in pre-Series A to blend affordability, quality, and convenience in Egypt’s retail FMCG market, one which Deloitte sizes at around USD 50 Bn. ILLA, a company that specializes in full-stack delivery solutions to small businesses and corporates in the same FMCG sector, raised USD 2 Mn to scale across the country.
While the aforementioned fundraisers all happened this November, that of Elmenus—a Fawry and Luxor Capital-led pre-Series C of USD 10 Mn—took place in July to bring the foodtech’s cumulative fundraiser to some USD 20 Mn.
It so happens that this year, JUMIA—the once beleaguered African tech unicorn—rolled out its restaurant-delivery service in Egypt to mark the tenth of such expansion in the continent. Last December, JUMIA and Egypt’s postal service partnered to allow the former to create pick-up locations for orders in the country’s ruralities.
As of today, about 80 percent of young Arabs frequently shop online. In 2019, obviously pre-pandemic, only the number stood at 71 percent. Post-pandemic, half of the Middle East and North Africa’s combined youth populace have become more accustomed to shopping online. Per forecasts, the trend is set to continue this year, as eCommerce gears for a 35 percent year-on-year growth in 2021 to realize a USD 30 Bn industry—twice the 2018 value.
In 2020, Egypt, Saudi Arabia, and the UAE led the eCommerce boom in the MENA region, especially as lockdowns and similar restrictions left consumers with no better option than to order items online. The entire region’s eCommerce sector ballooned by 52 percent to reach USD 22 Bn before the end of last year, but 80 percent of that value came from Egypt, Saudi Arabia, and the UAE.
Pandemic or no pandemic, people need to be fed, and eCommerce has proven itself to be the most ideal way to provide on-demand food on the go. Apparently, investors are aware of this and, as such, increasingly throwing their weight behind startups that exist to accelerate what could very well be the hottest niche in eCommerce: food and grocery delivery.
Image Courtesy: Darvideo TV