Appetito, an Egyptian on-demand grocery delivery firm, has raised $2 million in pre-Series A funding led by U.S. and MENA-focused venture capital firm Jedar Capital. Other investors in the round were Golden Palm Investments, and DFS Lab, as well as a group of prominent angel investors and family offices. The funding round comes after a $450,000 seed funding which the company closed in April.
Appetito tackles the challenge of the poor fast-moving consumer goods (FMCG) supply chain in Egypt by providing customers not only with a convenient experience but also an affordable one by sourcing the products directly from the manufacturers and selling them directly to them. Egypt has a retail FMCG market size of about $50 billion, and like most African countries, it is highly fragmented and inefficient. Products move from suppliers to distributors, and then from wholesalers to retailers. Before it finally gets to the end consumer, a lot of value is lost, especially for the consumers and suppliers. Appetito uses a dark store model, in which goods are purchased from suppliers, processed in mini fulfilment centres, and then shipped directly to consumers.
Launched in 2017, Appetito’s first line of products was groceries. But the company has now expanded, offering non-food items such as personal care items, detergents and stationery products. According to Shehab Mokhtar, Appetito gets all its products from top FMCG companies — Procter & Gamble, Hankin, Reckitt, Coca-Cola, Pepsi, and Kellogg’s — strikes deals with them and receives all 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, Egypt’s capital city.
Commenting on the funding, Sherif Nessim, a General Partner at Jedar Capital said: “In the past 12 months, I was amazed by how Shehab managed to build an A-plus team and created a great company culture that pushed Appetito the past 12 months to grow significantly more than 10X in terms of number of orders and revenue. Quick commerce/fast grocery delivery business model has been gaining grounds regionally and globally and I look forward to Appetito’s next phase as they expand to cover more areas in Egypt and start planning for regional growth.”
AJ Okereke, a Partner at Golden Palm, said that Appetito was providing the Egyptian market with a differentiated grocery e-commerce service. “Shehab and team are the first digital grocery service to utilize the “dark” store model for hyper-local delivery directly to consumer doorsteps. Golden Palm is thrilled to support Appetito’s innovative approach to owning the supply chain and guaranteeing item availability for consumers,” he said.
Appetito will use the funding to expand its operational footprint regionally and globally, as well as scale operations. As Appetito expands, it will face competition from companies offering similar services such as Rabbit, GoodsMart and Breadfast. The company also has plans to expand to 150 stores by 2024.