Logistics Startup and last mile delivery company Bosta has raised a US$6.7 million Series A funding round to scale its operations in Egypt while expanding to the Middle East and North African region. Bosta was founded by Mohamed Ezzat and Ahmed Gaber in 2017 to provide a full-stack delivery solution for e-commerce companies. Its product simplifies logistics, allowing its customers to have full control over the delivery process.
Bosta cofounder Ahmed Gaber
The logistics firm currently serves more than 2,200 businesses, covering all of Egypt. Since its inception, the company has delivered more than four million parcels, half of which have been completed since the COVID-19 outbreak. It claims to have a 95 per cent delivery success rate.
The US$6.7 million Series A funding round is led by global VC fund Silicon Badia, with participation from 4DX Ventures, Plug and Play Ventures, Wealthwell VC and Khawarizmi VC, as well as other regional and global investors. Bosta had previously received investment from DPDgroup, Fawry, Numu Capital and Cairo Angels.
With the fresh funds, the startup plans to scale its operations as well as expand into the GCC. It targets delivering 15 million parcels in Egypt in the next two years, and reaching the 20,000 user mark.
“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 Mohamed Ezzat, founder and chief executive officer (CEO) of Bosta.
Dr Fawaz Zu’bi, founder and CEO of Silicon Badia, said e-commerce had always had amazing potential in the region, but was always 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 realise its full promise and potential in a region that has now “turned on” digitally,” he said.
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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.
Mohammed Ezzat, the founder and CEO of Bosta
“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.
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.
“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).
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
This year is looking more favorable to Egyptian startups already. The latest startup to join the fund-raising train is Bosta, the Cairo-based startup that provides different types of last-mile delivery solutions to ecommerce businesses in Egypt. The startup has raised more than $1 million in Series A round of funding from the European parcel delivery giant DPDgroup.
co-founder and CEO Mohammed Ezzat
“We are thrilled to be one of the key pillars of this movement, and DPDgroup’s investment only solidifies our role even further,” Bosta’s co-founder and CEO Mohammed Ezzat
Here Is The Deal
Led by European delivery giant DPDgroup, Egyptian payments company Fawry that went public last year and which had previously invested in Bosta in late 2017 also participated in the round.
Bosta plans to use the investment to grow further and lead the ecommerce delivery market in Egypt.
The startup also plans to explore the option of expanding to some other regional markets and it now has a great partner in form of DPDgroup to help it realize this vision.
Why The Investors Invested
Although this round of investment was led by the DPDgroup, Egypt’s leading payment company Fawry also participated. According to a statement by Fawry on the occasion of its investment in Bosta in 2017, Bosta’s vision ‘‘complements our vision to scale ecommerce in the Egyptian Market, we are proud of the fact that Egyptian talent is capable of providing world class technology solutions” said Ashraf Sabry, Chairman & CEO of Fawry.
On its own, DPDgroup is a subsidiary of LaPoste, an international delivery network operated by the French state-owned postal service. So, its investment in Bosta is somewhat some validation of Bosta’s significant track records; and the fact that the investment by the group also includes a partnership between the two companies shows that this may be a strategic market entry move by the group, which according the statement by Bosta, is Europe’s second-largest operator in the courier, express and parcel (CEP) industry, delivering over 5.2 million parcel every day.
The European delivery company has been investing in logistics businesses in different parts of the world (which also includes $85 million investment in Southeast Asian last-mile logistics startup Ninja Van) but Bosta is company’s first investment in Egypt and it now aims to bring all its support for Bosta in Egypt and beyond.
Launched in 2017, Bosta provides different types of last-mile delivery solutions to ecommerce businesses in Egypt. It provides these businesses with next-day delivery, handles exchange shipments, customer returns and cash collection. The startup claims to have a 97 percent successful delivery rate.
The startup doesn’t own the fleet or have salaried drivers. It instead uses an Uber-like asset-light model with all the drivers on its network being freelancers who earn money for every completed parcel delivery.
The startup that has served over 5,000 businesses in Egypt to date has grown over ten times in the last twelve months to be delivering 150,000 parcels a month now, Bosta’s co-founder and CEO Mohammed Ezzat claimed.
Fetchr, one of the leading logistics startups of the Middle East & North Africa has been struggling lately and had a massive downround late last year but that hasn’t given Ezzat any sleepless night. He thinks they failed because of their own vision and mistakes. “If you look at the logistics sector, you also see a lot of successful companies operating around the world and we’ve been witnessing massive growth at Bosta.”
In a statement, he also said that the ecommerce industry in Egypt and the entire region is looking very positive and he’s right about it. According to a recent report by Bain & Co., ecommerce is expected to grow to $28.5 billion in MENA by 2022 from $8.3 billion (it was at, in 2019). Egypt is expected to grow 33% annually to reach $3 billion by 2022.
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.
He could be contacted at udohrapulu@gmail.com
