According to a recent report by Bain & Company, e-commerce is expected to The MENA will increase to $ 28.5 billion by 2019 from $ 8.3 billion in 2022. Egypt, one of the most active e-commerce countries in the region, Is expected To grow 33% Per year To reach $ 3 billion by 2022.
But for any e-commerce business to thrive, its last-mile delivery arm has to be well understood. Bosta is a company in Egypt that helps small businesses with logistics and last-mile delivery. Today, the company is announcing that it has closed a $ 6.7 million Series A investment. US and Middle East VC firm Silicon Badia led the round, With participation from 4DX Ventures, Plug and Play Ventures, Wealth Well VC, Khwarizmi VC, as well as other regional and global investors.
The investment comes one year after the company raised $ 2.5 million, which increases its total investment to $ 6.2 million..
Bosta launch of In 2017 by Mohammad Izzat and Ahmed Gabor. The company provides next day delivery to customers and handles exchange shipments, customer returns and cash collections..
The idea for Bosta came from his previous consumer goods startup Lynx during Ezzat’s time. Lynx, Egypt’s first YC-backed company, allows people in Egypt to buy brands from the US, China and the UK
As co-founder and COO at Lynx, Izzat was responsible for logistics, international approvals and last-mile delivery. In 2016, Egypt experienced an economic recession, coupled with the devaluation of the Egyptian pound and government restrictions on imports.. For the Lynx, this meant slower growth, but respect I was worried About fixing the last-mile delivery bit, which according to them, was a huge pain point.
“My nightmare was always the last mile. And at the time, you know that e-commerce is still very, very small. So it’s only 1% of the entire retail price,” he told ClearTips. “So I was always thinking, if we want to develop e-commerce, and we don’t have a strong company, because in the end, every transaction happens on an e-commerce platform. Transactions on a courier platform. “
E-commerce is a fragmented sector where 80% of transactions come from small businesses selling on Facebook, Instagram and social media in general. Most of these businesses lack a strong delivery experience, and Ezzat left Lynx the following year to start Bosta Bo.
Being in the parcel delivery industry, Bosta wants to help these companies grow. With success. It also strives to simplify logistics and allow its customers to have complete control over the delivery process.
“You can use Bosta to bring anything to your door. You buy in our local currency, and we buy everything, handle shipping, customs, clearance and bring it to your door, ”said the CEO.
The company does not have a fleet of vehicles to operate. Instead, it operates an Uber-like model where drivers sign up, become contractors and earn money at delivery is completed.
Since 2017, the company has delivered more than 4 million packages to businesses, more than half since the outbreak of the epidemic last year. Bosta completes more than 300,000 deliveries per month, 3.5 times more than the previous round, Ezzat said. They also claim that more than 2,200 businesses use its platform every day and achieve a 95% distribution success rate..
In addition to small businesses, Bosta works with major e-commerce platforms such as Souk (an Amazon company) and Jumia. Depending on the amount of cargo transported, Bosta charges around 35-40 Egyptian pounds from small businesses, while the big players Is charged Low, at 20-25 Egyptian pounds.
Speaking on the investment, Fawaz H Zubi said in a statement: “E-commerce has always had amazing potential in our region, but always was being held Something returned by payment, logistics, market fragmentation, or customer adoption. We Are excited Finally to help companies like Bosta emerge to tackle some of these issues and help e-commerce realize its full promise and potential in the field that is now ‘on’. Digital. “
Over the next two years, Bosta plans to distribute more than 15 million parcels in Egypt and serve more than 20,000 businesses. Will be money used For those reasons, as well as expanding operations throughout Africa, MENA and GCC.
“The investment is meant to dominate Egypt,” Izzat said. “We want to make sure that we deliver all over Egypt the next day, not In college In Cairo, where we currently do. And to be a market leader and be profitable when it comes to e-commerce on the continent. This is the main goal for us now and to start operations in Saudi Arabia. ”