Top 7 e-grocery startups in MENA that are gaining traction
Supermarkets began establishing in the western world around the 1920s, particularly the US. The giant superstores became so popular that brands brought in psychologists to help them grow their sales. Fast forward almost 100 years, going to a supermarket is a time-consuming task. To find the products one wants between tens of aisles has become a nightmare for many.
Not to forget the out-of-stock answer customers often get after walking up and down aisles to find where the product they want is located, then failing and asking for help from staff.
To address this issue and plug the market gap, e-commerce has stepped into grocery delivery — essentially a more organised form of what people in the region already practised by calling the vender asking items to be delivered to homes.
But now, online grocery delivery startups are giving tough competition to the energy-consuming supermarkets along with bringing efficiency to the system. Earlier this year Majid Al Futtaim bought Wadi.com only to later shut operations in favour of boosting e-commerce for its Carrefour.
Below, we focus on startups that are gaining traction in this space across the MENA region.
1. Nana Direct
First on the list is Nana Direct, a Saudi Arabia-based online grocery startup founded in 2016. Its core product is a technology suite that connects customers, in-store pickers, supermarkets and delivery services.
Led by its CEO Sami Alhelwah, the company raised a total of $11M in Series A, of which $6.6M was raised in February 2019. The round was co-led by Middle East Venture Partners (MEVP) and Impact46, who were joined by Saudi Arabia-based investors SVC, Watar Partners, as well as international venture capital firm Wamda Capital.
As part of its fundraising announcement, Nana highlighted that its grocery platform currently serves 13 cities across Saudi Arabia and has seen a 3X increase in turnover in the past year.
Founded in 2016 by Amira Rashad, Bulkwhiz uses a slightly different approach to online groceries. As the name of the company might suggest, they offer household and office products, including groceries, in bulk.
In order to do that in the most efficient way possible, the company claims to be the first local startup in its sector to develop its own proprietary AI-enabled technology that offers a personalised shopping experience.
Also established in 2016, InstaSalla is a product by Smart Mart, a Kuwait-based company founded by Saud Almekhyal.
The company, Smart Mart, offers a host of products and services that provide solutions to operate e-commerce platforms. InstaSalla, one of its flagship products, is an e-grocery platform that delivers food from hypermarkets and grocery stores to your home.
Not long after being founded, InstaSalla received a $3M investment, with which it aims to become the largest online grocery platform in Kuwait.
4. el Grocer
However, unlike many other grocery delivery startups, El Grocer decided not to go the venture capital route – instead, it is the only company on this list that has decided to go for equity crowdfunding, raising $1.9M over multiple funding rounds.
Moreover, recently the startup has received non-equity assistance from Sheraa, the incubator and accelerator based out of Sharjah.
In just over one year since its launch, the company raised $750K from VentureFriends, a Greece-based venture capital fund, followed by an undisclosed investment by Ronaldo Mouchawar’s Souq.com, which took a “significant minority stake” in the company.
Following these investments, the company has improved its offerings, and currently provides an average delivery time of 45 minutes.
Since its launch, the company has focused on several features for its customers: the GoodsMart box, which is delivered to customers’ doorsteps before 6 a.m., customised delivery schedules that allow for daily, weekly or monthly deliveries, as well as a wallet system, which allows clients to charge their prepaid wallet to purchase orders.
With these features, the six-year old company has raised $750K to date from Algebra Ventures, the Egypt-based venture capital firm.
Founded late 2018 by Mohamed Abbas, Trolley is another Cairo-based startup that focuses on grocery deliveries in Egypt. Mr. Abbas has over ten years of experience in the FMCG industry, which he applies to sell and deliver groceries in Cairo and Giza through the company’s web and mobile-based platform.
As part of its operating model, Trolley owns and stores part of its inventory in its own warehouse and distribution centre, on top of its reliance on smaller grocery chains for the rest of its products. With this hybrid model, the company has raised $200K from an unnamed Kuwaiti investor earlier in 2019, and looks to expand its operations in Egypt.
These startups are playing a huge role in changing consumer behaviour away from brick-and-mortar supermarkets. While there are many who still prefer to select fresh produce themselves, experience of getting good quality produce via online orders has changed many people's perspectives. Moreover, the ability of e-commerce to be more cost efficient has hooked a big chunk of the price sensitive population. Having said that, even today, online fresh produce prices are often at par with supermarkets who have the power of scale, which is making this switch difficult and prolongated.