Bosta, a Cairo-based ecommerce logistics startup, has secured $6.7 million in a Series A round led by Silicon Badia, an Amman-based global venture capital firm. 4DX Ventures, Plug and Play Ventures, Wealthwell VC, Khwarizmi Ventures, and a few other investors also participated in the round. This brings the startup’s overall investment to date to $9.1 million.
“Solving the last mile delivery problem for ecommerce companies is very crucial for the ecommerce business to grow in Egypt and the Middle East. As a company, we are committed to helping the ecommerce sector grow by providing them with speedy delivery, quality, and exceptional service — all while making sure our prices are one of the most competitive to help them with their tight unit economics and help them grow a profitable business. At Bosta, with our customer-driven approach and finding tech-driven solutions, we make sure that we are able to hit the three pillars while keeping our costs as low as possible,” said Mohammed Ezzat, the founder and CEO of Bosta.
Here Is What You Need To Know
- By the end of 2021, the startup wants to expand to Saudi Arabia buoyed by the funding. Following that, it may also extend to other Middle Eastern markets. Khwarizmi Ventures, one of the investors in this round, is the venture arm of the Kadi Group, which owns and operates various logistics businesses in Saudi Arabia, including Zajil. They will ostensibly assist Bosta in their expansion into Saudi Arabia.
- Bosta will also use the new funds to expand its business in Egypt where it hopes to deliver over 15 million parcels in the next two years.
- Last year, Bosta had announced a seven-figure (USD) Series A from European parcel delivery company DPDgroup and Fawry, but it has clarified that the $6.7 million it has announced today is in fresh funds and does not include any amount from the previously announced Series A.
Why The Investors Invested
Despite the rise of ecommerce in North Africa, logistics remains a major source of frustration for both companies and consumers, who are often disappointed by the weak last-mile delivery experience provided by the majority of merchants.
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Many startups have attempted to address these problems, but it is fair to say that no significant breakthroughs have yet been recorded.
Fetchr was one of the logistics companies in the region (in this space) on which many were banking, but it, too, failed to deliver, and it has since been attempting to resurrect itself with new management.
Investment in Bosta is one way the investors are showing that they trust Bosta can do the undoable.
“Ecommerce has always had amazing potential in our region but was always being held back by something whether payments, logistics, market fragmentation, or customer adoption. We are excited to finally see companies like Bosta emerge to tackle some of these issues and help ecommerce realize its full promise and potential in a region that has now ‘turned on’ digitally,” Dr. Fawaz H. Zu’bi, the founder and CEO of Silicon Badia, in a statement, said.
Namek Zu’bi, co-founder and Managing Partner of Silicon Badia, however hinted Bosta’s numbers as one of the most important factors that nailed the investment.
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“We are really impressed by what Mohamed, Ahmed, and their team have accomplished in a very challenging sector (logistics) and market (Egypt). Numbers speak for themselves and this company is on track to triple across its KPIs this year — all while maintaining a superior customer experience, something that is critical in this space.”
And yet, even though North Africa has not recorded major successes in the ecommerce logistics sector, the same cannot be said of other parts of Africa. ParcelNinja, a South African startup doing exactly what Bosta is doing was recently acquired by Imperial Logistics, a Johannesburg Stock Exchange-listed logistics company, for an undisclosed amount.
However, although the exact value of the deal was not disclosed, ParcelNinja was acquired by Imperial at the same time as the Johannesburg-based pharmaceutical manufacturing and healthcare services company Pharmafrique, which trades as Kiara Health. Both deals were put at 120 million rand ($8.2 million). The total amount of funding raised by Parcelninja during the course of its startup journey stands at $1.7m and that the last time it raised funding was in 2015.
Investment in Bosta closely followed that made recently in fellow country startup Flextock.
A Look At What The Startup Does
The Egyptian startup, which was established in 2017, provides last-mile delivery services to online businesses in Egypt. About 3,000 companies use its services to distribute goods all over Egypt. In a statement, Bosta stated that its guaranteed next-day delivery service is available throughout the world. According to the startup, it is currently shipping 300,000 parcels a month on average, with a performance rate of 95%.
Bosta relies on a network of independent drivers who are compensated for each order delivered successfully. This fleet handles the first and last mile, while leased vans handle the middle mile (for inter-city couriers).
Bosta logistics bosta logistics
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer