Egyptian grocery delivery startup appetite has raised $ 2 million in pre-Series A funding, the company confirmed to TechCrunch today.
The turn, which comes after the the company’s $ 450,000 funding round in April, was led by Venture capital firm focused on US and MENA region Capital of Jedar. Pan-African VC Golden Palm Investments, DFS Lab, some angel investors and family offices have also invested money in the company.
Appetito wants to tackle inefficiencies in Egypt’s FMCG supply chain, CEO Chehab Mokhtar TechCrunch said in an interview.
Egypt, home to over 100 million people, has a retail business FMCG market size approximately $ 50 billion and, similar to other African countries, is very fragmented and inefficient. When products move from suppliers to distributors through wholesalers and retailers before the end consumer, a lot of value is missing in the supply chain, especially for consumers and suppliers.
“We are trying to provide customers not only convenient, but also affordable experience in purchasing the products directly manufacturers and sell them directly to them, ”Mokhtar said. “We believe that we can provide a convenient and affordable experience while solving inefficiencies in the retail industry’s supply chain.
Appetito’s first product line when it launched in 2017 was the grocery store. But the company now offers non-food items such as personal care items, detergents and stationery products..
Mokhtar says Appetito sources its products from major consumer companies – Procter & Gamble, Hankin, Reckitt, Coca-Cola, Pepsi and Kellogg’s – makes deals with them and receives all of their goods and products in its warehouses. The goods are then shipped to the company’s dark stores, of which there are currently seven in Cairo, the Egyptian capital..
Suppose there’s a takeaway last year from the rise of fast-paced grocery and on-demand delivery startups around the world, such as Gopuff, Flink, and Gorillas (aside from their frenzy of collecting funds), this is how they to prioritize speed and convenience rather than quality and affordability.
Appetito does not want to take this direction; instead, it is keen on providing quality and affordable articles to its users. In the words of CEO, Appetito is not trying to become an imitator of these models, as Egypt is a different market with a unique set of requirements.
The variation of models can also be seen in their delivery times. While GoPuff and the others make sure deliveries are finished in less than 10-20 minutes, Appetito deliveries can take up to an hour, the next day or once a week, if scheduled.
“We try to mix affordability and convenience. If we go there just for convenience, which is 10 or 15 minutes, it will be at the expense of affordability, ”Mokhtar said.. “And this is something that we are not seeking or even trying to achieve on a large scale in Egypt or in the countries that we are trying to enter in the future.. “
To fully understand how it prioritizes quality, Appetito has private label products under its name, a decision that offers the company a certain exclusivity in the eyes of the customers and offers higher margins. Mokhtar sees them, alongside their new meal kit option similar to Blue Apron’s model, as essential verticals for the company over the next two years.
Speaking of how Appetito makes money, Mokhtar says the company is getting discounts from vendors and running promotions for FMCG companies on its platform..
“Every company wants to promote its brands; they can promote it through us because we have over 100,000 downloads on our app on google store and play store. We have a large consumer base and this is an opportunity for brands to market themselves on our platform, ”said the CEO.
Asked about revenue, traction and plans, Mokhtar said the company, which has grown 6-fold in revenue since April, wants to expand its dark stores to 150 over the next three years. In a press release, the general partner of Jedar Capital, Sherif Nessim, said the company’s orders have grown tenfold in the past year.
“The business model of fast trade and fast grocery delivery has gained ground at regional level and globally and I look forward to the next phase of Appetito as they expand to cover more regions in Egypt and start planning for regional growth, ”he added.
As it grows, Appetito will face competition from companies offering comparable services such as Rabbit, GoodsMart and Breadfast. These startups, representing an Egyptian space in full growth of grocery stores and local deliveries, lead the way through Africa and raised more money than their counterparts in other countries.
Should they continue to fundraise to meet the growing needs of consumers whose habits and purchasing habits have evolved since last year, Egypt will continue to dominate this space in Africa just like nigerian startups have been the most sought after in fintech across the continent.