FreshSource, an Egyptian agritech startup that aims to reduce food waste by allowing farmers to interact directly with businesses without the use of third parties or commercial intermediaries, has secured a seven-figure seed round led by Wamda and 4DX.
“I think agritech in general is still gaining traction worldwide, and we’ve seen a lot of advancements throughout the industry over the past few years. I think Egypt will continue to establish itself as one of the worldwide agri pioneers. I believe the reason it has been overlooked is that it is an extremely difficult and complicated field. Working with perishable goods with dynamic prices makes it hard to disrupt. Our cold chain expertise that is built three decades of experience in the field from the family business gave us a strong foothold in the industry and strategic advantage,” says Omar Emara, co-founder at FreshSource.
The startup will use the latest amount of funds to expand its operations throughout Egypt and help more rural areas.
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“We are planning to use the funds to expand our team and invest more in our technology. Also, we are going to be covering all of Egypt’s governorates by the end of 2023. By 2024, we will start considering a global expansion plan,” Farah adds.
A Look At What The Startup Does
Farah Emara and her brother, Omar Emara, co-founded the company in 2018, and it has been functioning since early 2019.
FreshSource allows medium to large-scale farmers to enter into contract farming agreements, allowing them to gain access to both financing and farm input items. FreshSource buys fresh produce directly from farmers during harvest season and distributes it to companies including restaurants and hotels, as well as digital grocery ordering markets. In addition, the firm offers end-to-end last-mile connection for improved logistics and storage services.
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The startup believes that by connecting farmers directly to vendors and businesses, it may help farmers reduce food waste by 20%. This is on top of ensuring that both farmers and businesses obtain the finest prices possible, maximizing their profits.
The most difficult task for FreshSource has been to create a product that is both scalable and accessible to farmers and companies. Farah notes that they have encountered resistance from people who hesitate to completely abandon pen and paper.
“In the beginning, we were just using WhatsApp and telephones to interact with users. We had people leave us a missed call, we can call them back so that they don’t have to pay anything. And then we started to introduce different payment methods for them to take their wages and also other means for them to communicate with us. And that’s how we’re going to continue to roll out our tech, in incremental phases,” she says.
For Omar, being one of the first agritech startups to address food loss carries “a lot of responsibility to prove that the agriculture industry is ready for disruption. It has incredible potential as one of the largest industries in Egypt and in the region. We will continue innovating and working towards our mission”.
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Agriculture is one of Egypt’s most important industries, accounting for more than 11% of the country’s GDP and 28% of all jobs. Despite its importance, the industry is hampered by a long and complicated retail supply chain, which results in poor food availability, high food waste, and inflated consumer pricing.
The Egyptian Center for Economic Studies (ECES) published a study in 2020 that found that the final retail price of fresh food sold to consumers is twice as high as the original price of the produce sold to the farmer. This can mostly be attributed to inefficient logistics, which forces retailers to boost prices to cover the costs of shipping and inventory management.
FreshSource farmers Egypt FreshSource farmers Egypt
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