ShipBlu Raises $ 2.4 million for its e-commerce and fulfillment service in Egypt – TechCrunch

African e-commerce fulfillment startups supported by Y Combinator seem to be appealing this year’s investor interest in their niche e-commerce game.

Summer batch graduate ShipBlu is the latest on this list and confirmed to TechCrunch that he raised $ 2.4 million in seed funding.

Founded by Ali Nasser, Ahmed ElKawass, Abdelrahman Hosny in 2020, the company operates a delivery and fulfillment model. It delivers packages of all kinds for dealers and retailers – from corner shops and social media to fashion retailers with thousands of shipments and international brands – to customers in Egypt.

On the fulfillment side, ShipBlu stores the dealers’ products in rented warehouses. It then connects to the dealers’ online shops and monitors orders via 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, depending on two standard sizes, destination and shipping speed.

While these three factors are common in e-commerce and fulfillment, CEO Nasser said shipping speed is not given the same priority in Egypt as the other two.

According to him, ShipBlu is one of the few e-commerce fulfillment companies that offers this service to its customers in the country.

“We let the retailer decide: does he have to bring the product to his customer overnight and for this reason, pay or bill the customer for overnight accommodation? ”said Nasser in an interview with TechCrunch.

“Or are you ready for more? budget friendly Option and would you like to send this package in three to five days? We offer this option to dealers who in turn can decide to offer it to their customers. So it could be the choice of the customer or the dealer. “

ShipBlu only fully started this August. According to its YC profile, ShipBlu signed more than 40 dealers in the first month. And since then, the company has succeeded in doubling its customer base and tripling sales in the same period, said Nasser without giving any specific figures.

Nasser says he wants ShipBlu’s network and infrastructure to reach 99% of the Egyptian population in the next few months.

“Whether you live in a small village, a big city or a big city, we want to reach you and have the infrastructure to bring your delivery to you,” said the CEO.

The idea behind such a daring step – which seems a bit tedious given the schedule – stems from the founders’ ambition to change an industry that has lagged behind other regions in the wider GCC such as Saudi Arabia and the United Arab Emirates. in terms of ecommerce penetration.

Over 100 million people live in the North African country compared to the over 30 million people in Saudi Arabia, but the e-commerce market in Egypt is a third of the Saudi Arabian market.

A major reason for this gap has always been that the required infrastructure facilitate The e-commerce process in Egypt is miserable. It even goes deep at some elementary level where zip codes are barely Exactly or not available, which poses many challenges for the last mile or delivery provider.

Postal codes were one of the problems Nasser saw in Egypt’s fragmented e-commerce and fulfillment market during his return to the country from the United States months before the pandemic broke out.

As online payments boomed worldwide and in Egypt and research found that the last mile delivery market in MENA was over $ 3.1 billion yearly, Nasser and his co-founder ElKawass, Abdelrahman Hosny have teamed up to found ShipBlu.

“It was at this time that it hit us and we realized how much more is possible be done for delivery services in the service standard and the features available today. Compared to Europe and the US and other parts of the world there was only so much more that we could bring to market. “

But Egypt is a very different market from these developed regions. For example, 40% of deliveries in the country fail while the global benchmark for the latter is around 8%. The high failure rate during delivery makes the operating costs for over 150 providers in Egypt generally high. ShipBlu, differentiate yourself from the market says it has developed AI and ML algorithms to “Reduce costs, meet delivery restrictions and refine operating assumptions.”

The CEO says ShipBlu’s ultimate goal is to get customers to choose a three-hour delivery window for their packages and know what date to expect, which is in contrast to most traditional e-commerce fulfillment companies.

“About 56% of the times someone places an order online in Egypt, they don’t even have a delivery date. After you’ve placed your order and received an email confirmation, there is complete silence until, on a random day, you receive a call from an agent who is on his way to ask you if you are available to help to pick up the order package. We’ll change that, ”he said.

ShipBlu competes with companies like Flextock and Bosta in Egypt. And after completing the seed round, the company now has a joint investor with Flextock in Flexport, the multi-billion dollar freight and logistics company supported by YC in 2014. This year, the unicorn also invested in the Nigerian e-commerce fulfillment startup Sendbox.

MENA-focused venture capital firm Nama Ventures led the seed round of ShipBlu with 1984 Ventures participation; Orange Ventures, Orange Telecom’s venture capital arm; Starling Ventures and other VC funds and angel investors. The company says the investment will help expand its service offering and coverage across Egypt.

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