The convenience delivery and grocery on-demand craze has taken over Europe and America in the past year and is slowly making its way to Africa and the Middle East.
Today's spotlight is on RabbitMart or Rabbit, a stealthy startup that raised $11 million in seed funding. Rabbit is one of many startups that investors are eager to invest in to help deliver groceries and other products from local fulfilment centres to homes within 20 minutes.
Rabbit, a pioneer in Egypt and Africa, is alongside Breadfast which announced recently that it will begin to deliver orders in 20 minutes or less.
Raed Ventures and Foundation Venture from San Francisco, Global Founders Capital, Raed Ventures and Foundation Venture participated in the pre-seed round. This was a record for Africa and the Middle East and beats Egyptian fintech Telda's $5 million.
Rabbit was founded by Ahmad Yousry and Walid Shabana as well as Ismail Hafez, Tarek El Geresy, and Ismail Hafez. In an interview with TechCrunch CEO Yousry stated that the founders discussed the possibility of replicating fast delivery models for Egypt after Yousry noticed a pattern of failed and slow deliveries every time he ordered groceries.
He said, "You place an order but aren't sure if it will arrive or if it's out of stock." "You don't know if it will be delivered 100%, on time, or delayed. It's not clear what you will get.
Groceries are what people forget to buy, and then panic when they need them. This is why many European on-demand platforms, like Getir or Gorillas launched in this vertical. Over time they realized that on-demand retail, which offers other items than what an impulse buyer would find in a supermarket, was a larger market and potential opportunity.
This was also the case for Yousry and his cofounders. They studied cases where people purchased stuff from ecommerce platforms, but would wait days to receive it, and settled on basic fashion, cosmetics and household items.
"We'll let the market decide what we sell, whatever the consumer wants in less than 20 minutes. He said that the company is not limited to being a grocery player and differentiates itself from other grocery delivery services like GoodsMart in Egypt and Appetito in Egypt.
Rabbit works in a similar way to other international convenience delivery startups. It took the Amazon model of large warehousing, and broke it down into smaller pieces -- micro-fulfilment centers -- in four neighborhoods across Cairo: Mohandeseen (Zmalek), Maadi, and Nasr City.
Rabbit purchases these five categories (groceries and basic fashion items, toys, and household items) directly from third-party suppliers. It then stores the items in its warehouses and adds a markup. Finally, it sells via an app that charges a flat delivery fee to customers.
According to the company, it manages the entire platform experience from start to finish. The company has a live inventory tracking program in its warehouses that allows it to track what's on the shelves and to equip all riders, whether they are employed or self-employed, with the appropriate protective gear and technology to make deliveries. Six-month-old startup plans on adding a new fulfilment center every other week until the end of the year, to provide coverage in several major cities over the next twelve months.
Rabbit launched in June, but has been operating stealthily since then. Within its first two days, 30% of orders were delivered in under 20 minutes. Last week, that number jumped to 90%.
It is simple, the way we see it. McDonald's sandwiches can be delivered in as little as 30 minutes. However, they still need to make the sandwich. If we do our job right, we can deliver within 20 minutes.
Numerous publications have been covering the madness in the convenience delivery industry. They are asking whether these companies are able to meet their delivery deadlines without causing any disruption to their drivers. This is a problem Gorillas faced this year. In an effort to deliver deliveries in under 10 minutes, some drivers protested and demanded better working conditions.
Yousry claims that Rabbit's tech operations and tech are so efficient that an in-house team can receive an order and package it in less than 120 seconds. Drivers are responsible for the remainder, which takes around 18 minutes. Yousry hopes that this will ensure that the company is not at odds with its drivers.
"That's precisely why we chose 20 minutes over 10. Yousry stated that while we could do it in 10 minutes, we don't want to risk our riders' health.
"For us, there's two minutes under the roofing, and then there's the delivery time. It gives the couriers enough time to drive safely. They don't have to rush and follow traffic regulations.
Although only a few people have tried the service so far, Yousry said that the company currently completes more orders per location than 50 every day.
He anticipates Rabbit will soon process hundreds of thousands orders per month. How does Rabbit plan to accomplish this feat with just 50 riders? To meet the demand, the CEO stated that the company has over 100 positions in its driver, human resources and in-store departments.
Lorenzo Franzi (a partner at Global Founders Capital) spoke out about the investment. He said that the Rabbit team was setting a new standard in Egypt's grocery industry and for Egypt as a whole. They provide a unique experience for customers, compared to traditional grocery stores and local shops.
Raed Ventures' Talal Alasmari said that his company backed the startup for six months because its founders had the vision and expertise necessary to manage the "ultrafast delivery domain" in Egypt and the Middle East.