ShipBlu pockets $ 2.4 million for its e-commerce and fulfillment service in Egypt – TechCrunch
African e-commerce execution startups backed by Y Combinator appear to sting the interest of investors this year for their e-commerce niche.
Summer batch graduate ShipBlue is last on this list and has confirmed to TechCrunch that it has raised $ 2.4 million in seed funding.
The company, founded by Ali nasser, Ahmed El Kawass, Abdelrahman Hosny in 2020, operates a delivery and fulfillment model. This delivers packages of all kinds for traders and retailers – ranging from mom and pop stores and social media to fashion retailers that do thousands of international shipments and brands – to customers in Egypt.
On the execution side, ShipBlu stores merchant products in warehouses that it rents. Then it connects to merchants’ online stores and monitors orders through a dashboard. So when they come in, ShipBlu picks and packs the orders from the warehouse and sends them to customers.
ShipBlu charges its customers per package, based on two standard sizes, destination and shipping speed.
While these three factors are common in e-commerce and order processing, CEO Nasser said shipping speed is not a priority the same as the other two in Egypt.
According to him, ShipBlu is one of the few e-commerce fulfillment companies to offer this service to customers nationwide..
âWe let the merchant decide: does he need to deliver this product to his customer overnight? so, pay or charge the customer a night charge? Nasser told TechCrunch in an interview.
“Or are they ready to economic option and would like to ship this package in three to five days? We offer this option to merchants, who in turn may decide to offer it to customers. So it can be the choice of the customer or the choice of the traders.
ShipBlu only fully launched in august. By its YC Profile, ShipBlu signed with over 40 merchants in its first month. And since then, the company has managed to double its customer base while tripling its revenue in the same period, Nasser said without giving specific figures.
In the coming months, Nasser says he wants ShipBlu’s network and infrastructure to reach 99% of Egypt’s population.
âWhether you live in a small village, a big city or a big city, we want to be able to reach you and have the necessary infrastructure to deliver to you,â said the CEO.
The idea behind such a bold move – which seems a bit of a stretch given the timeline – comes from the founders’ ambition to change an industry that has lagged behind other wider GCC regions, such as Saudi Arabia and the United Arab Emirates, in terms of e-commerce penetration.
Over 100 million people live in this North African country, compared to over 30 million in Saudi Arabia, but Egypt’s e-commerce market is one-third that of Saudi Arabia.
An important reason this gap has always existed is that the infrastructure needed to facilitate e-commerce process in Egypt is catastrophic. It is deep even at an elementary level where zip codes are barely accurate or non-existent, presenting many challenges for last mile or delivery providers.
Postal codes were one of the issues Nasser saw in Egypt’s fragmented e-commerce and order fulfillment market when he returned from the United States to the country months before the outbreak of the pandemic.
As online payments exploded around the world and in Egypt and after discovering through research that the size of the last mile delivery market in the MENA region is over $ 3.1 billion. annually, Nasser and his ElKawass co-founders, Abdelrahman Hosny have come together to launch ShipBlu.
“It was this period that struck us and we realized how much more to be finished for delivery services in the service standard and functionality available today. Compared to Europe, the United States and other parts of the world, there was only so much more we could bring to the market.
But Egypt is a totally different market compared to these developed regions. For example, 40% of deliveries fail within the country, while the global benchmark for the latter is around 8%. The high rate of delivery failure makes operating costs for more than 150 suppliers in Egypt generally high. ShipBlu, stand out market, claims to have developed AI and ML algorithms for âReduce costs, respect delivery constraints and refine operating assumptionsâ.
CEO says ShipBlu’s end goal is to have customers choose a three-hour delivery window for their packages and know when to expect them, which contrasts with how most processors work. traditional e-commerce orders.
âAbout 56% of the time, when someone in Egypt places an order online, they don’t even have a delivery date.. Once you have placed your order and received a confirmation email, there is complete silence until, one random day, you get a call from the agent who is en route to ask you if you are available to collect the package. We are changing that, âhe said.
ShipBlu competes with Flextock and Bosta in Egypt. And after the completion of its seed cycle, the company now has a joint investor with Flextock in Flexport, the billion dollar freight and logistics company backed by YC in 2014. The Unicorn has also invested this year. in Nigerian e-commerce management startup Sendbox.
MENA-focused venture capital firm Nama Ventures led ShipBlu’s seed cycle with participation from 1984 Ventures; Orange Ventures, the venture capital arm of Orange Telecom; Starling Ventures and other venture capital funds and angel investors. Company says investment will help expand service offering and coverage across Egypt.