Township e-commerce startup Yebo Fresh secures R78m to fuel expansion
The funding will allow the company – which started in Hout Bay’s Imizamo Yethu three years ago and now delivers to more than 25 townships in the greater Cape Town and Johannesburg areas – to expand its service further.
While the South African upper market is well-served by quick commerce delivery services such as Checkers Sixty60 and PicknPay ASAP, Yebo Fresh is among the few players exclusively focused on the township market and successfully working with a rapidly growing network of spaza shops, prepared food outlets and other township businesses.
Growing access to township market
According to Yebo Fresh, its service offers investors, suppliers and partners a unique opportunity to tap into the multi-billion South African township market. The company aims to make it easier for independent businesses to purchase groceries and other essential items. Orders are placed via WhatsApp or through the Yebo Fresh team of field sales agents, resulting in a streamlined purchasing process.
Using a dark store-based fulfilment model, Yebo Fresh is able to deliver orders within 24 hours, eliminating the cost and hassle of shopping trips to wholesalers. Additionally, Yebo Fresh offers a buy-now-pay-later option. This process is guided by customer insights and algorithms and opens the door to informal businesses that do not currently have access to formal loans.
Throughout 2021 and 2022, Yebo Fresh successfully secured two rounds of bridge funding from current and new investors, including AckerX, the investment vehicle of fast-fashion retailer Ackermans. These rounds are now converting during the current round of investment.
The R78m in new capital will allow Yebo Fresh to expand further, significantly build on its physical and systems infrastructure and attract new talent. “We are incredibly proud of our progress to service this under-served market. The funding will allow us to take our efforts to the next level,” says Lerato Ramollo, commercial director at Yebo Fresh.
The pre-series A investment was led by Enza Capital. It was secured with participation from Swiss Impact investors Elea Foundation, and Harvest, the local investment fund of the international Endeavor entrepreneurs. Additional re-investments have also been secured from current investors including E4EAFrica, Yebo Fresh’s largest investor. Private investment vehicle Simple.Capital was the lead advisor on the deal.
John Lazar, general partner at Enza Capital, says they “are thrilled to back the exceptional Yebo Fresh team. They are fundamentally changing the way essential goods are provided to the township market, an underserved but vibrant and growing segment of the South African economy”.
Courtesy of Bizcommunity – read full article here.