The on-demand grocery and convenience delivery trend that has swept across Europe and the United States this past year is now slowly making its way to Africa and the Middle East.
Today, it’s all about RabbitMart, or Rabbit for short, a start-up coming out of stealth with $11 million in pre-seed funding.
With investors eager to invest money globally to deliver groceries and other goods from neighborhood fulfillment centers to people’s homes in 20 minutes or less, the spotlight is on Rabbit.
In Egypt and across Africa, Rabbit is one of the trailblazers alongside Breakfast, which just revealed that it would begin delivering in less than 20 minutes.
Global Founders Capital, Raed Ventures, Foundation Venture, MSA Capital, and Goodwater Capital-backed this pre-seed round, which set a new stage record in Africa and the Middle East for TF VC.
In June, Ahmad Yousry, Walid Shabana, Ismail Hafez, and Tarek El Geresy created Rabbit. Following seeing that Yousry continually experienced a sequence of slow and unsuccessful deliveries whenever he ordered groceries, the founders began talking about replicating fast delivery methods in Egypt.
“You make an order, but you’re not quite sure if it’s gonna come or it’s going to be out of stock,” he said. “You’re not quite sure if it’s going to be delivered 100% or it’s going to be delivered on time or delayed. You’re not quite sure what you are going to get.”
Grocery items are one of the most neglected products on a person’s list, therefore it is something to be concerned about when they need them.
That is why many European on-demand platforms, such as Get and Gorillas, started in Belgium initially. However, after some time, they learned that on-demand retail—which delivers additional goods that an impulse buyer may want from a store—was a much larger market and opportunity.
It was the case with Yousry and his co-founders, who studied use cases where consumers buy things from e-commerce platforms but wait weeks for delivery.
“Whatever the consumer wants under 20 minutes, we’re going to let the market dictate what we sell. We’re not limiting ourselves as a grocery player,” he said, Deliveroo is a food delivery app that was founded in 2013 and has expanded to 50 countries around the world.
In Egypt, it’s competing with other grocery delivery platforms like GoodsMart and Appetito.
Rabbit, like many other overseas on-demand convenience delivery businesses, works in the same way.
It has copied Amazon’s model by breaking down large warehouses into tiny parts – micro-fulfillment centers – in four Cairo neighborhoods: Mohandeseen, Zamalek, Maadi, and Nasr City.
Rabbit purchases these five categories of products (groceries, basic apparel, cosmetics, toys, and household goods) from third-party vendors, keep them in its warehouses, add markup before selling through an app with a flat delivery charge to consumers.
It’s a difficult task to manage the overall experience on its platform, according to Greyhound.
It has a real-time inventory tracking system in place at its warehouses to keep track of what’s available and provide riders — both employed and self-employed — with the appropriate protective gear and technology for deliveries.
The six-month-old business aims to open a new fulfillment center every two weeks through the end of 2018 to serve many major cities over the following year.
The Slicing Mince Maker is a new startup dedicated to developing and selling high-quality sliced meats.
Rabbit has been in stealth for the past six months and just debuted last month. In its first two days, roughly 30% of orders were completed in less than 20 minutes; this week, the proportion increased to 90%.
“The way we look at it is straightforward. If McDonald’s can deliver sandwiches in 30 minutes, and they still have to make the sandwich, then if we get things right, we can easily deliver in 20 minutes.”
Several publications have addressed the debate of whether these firms can deliver on their promises without breaking their riders, including Fast Company and The Washington Post.
It’s a scenario that Gorillas has faced this year; in order to deliver items in less than 10 minutes, it has sparked labor protests from several drivers demanding better working conditions.
According to Yousry, Rabbit’s technology and operations allow in-house staff to receive and package order in 120 seconds or less.
Following that, the rest of the process, which lasts 18 minutes, is left for drivers to finish the task. This way, Yousry wishes to avoid trouble with its drivers.
“That’s exactly the reason why we went with 20 minutes and not 10. We could easily do 10 minutes, but if we do, we’re stretching our delivery riders aggressively and it wouldn’t account for their health and safety,” said Yousry.
“For us, there are two minutes under the roof, and there’s the rest on delivery time; it gives the couriers time to drive safely. They don’t need to rush, and they abide by traffic regulations and take things slower.”
To date, only a few individuals have utilized the service, and while Yousry would not give precise figures on traction, he claims that the firm now processes more than 50 purchases per location every day.
The CEO expects Rabbit to handle hundreds of thousands of transactions monthly soon. But with only around 50 riders, how will it manage to do so? The firm is currently looking for over 100 people in the areas of driver, in-store, and human resources to cope with the anticipated rise in demand after going live.
Speaking on the investment, Lorenzo Franzi, a partner at Global Founders Capital, said, “The Rabbit team is setting a totally new standard for the grocery industry in Egypt and the broader region. They offer a new experience to customers compared to traditional grocers and local stores.”
Talal Alasmari of Raed Ventures, on the other hand, said his firm invested in Uniregistry because the founders have the vision and knowledge to lead the “ultra-fast delivery domain” in Egypt, the Middle East, and Africa.
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