Breadfast in Egypt, wins $26 million to establish a ‘Gopuff for Africa and the Middle East’

Nearly $1 trillion is spent each year on food and grocery delivery across Africa and the Middle East. In both regions, Egypt is a major player because of its young and rising population.

As in Europe and the United States this year, investors in Africa are putting their money where their mouth is to take advantage of the new but fast-growing sector.

An online grocer who aims to take the region by storm has acquired $26 million in Series A investment from an impressive set of investors. Vostok New Ventures, Endure Capital, JAM Firm, YC Continuity Fund, a significant undisclosed Saudi-based fund, Shorooq Partners, 4DX Ventures, and logistics giant Flexport are among the participating investors.

Two years ago, Breadfast raised a $2 million pre-Series A round. More than $30 million has been invested in the Egyptian on-demand delivery service. 

Mostafa Amin, Muhammad Habib, and Abdallah Nofal founded Breadfast in 2017 with the goal of delivering freshly baked bread and pastries to clients. Now it’s a full-fledged online grocery store in Egypt, Africa, with over 2,500 SKUs.

As the “most basic food unit in an Egyptian household,” CEO Amin mentioned in a WhatsApp call, the founders started with bread. It was the company’s first model, delivering bread the next morning after clients ordered it.

To enter the market, Amin says Breadfast used a blend of better customer service and a local supply chain methodology. Before Gorillas, Jiffy, and Flink, the company was one of the early adopters of managing a native supply chain globally. When Breadfast began in 2017, the major players were either marketplaces or aggregators, including Instacart and Postmates.  

Four years later, rapid on-demand delivery is one of the world’s hottest startup areas. It has transformed how consumers consume daily necessities, with corporations adopting micro-fulfillment points and asset-heavy models to deliver in 10-30 minutes.

Breadfast’s quest to be able to support fast deliveries took some thorough planning. After providing same-day bread delivery, the company expanded its product portfolio (supermarket items such as coffee, dairy, meat, fruits, vegetables, personal hygiene products and some electronics, turning into an online supermarket).

A year later, in 2019, Breadfast expanded its micro-fulfillment stations and reduced delivery time to 60 minutes. It now controls its whole supply chain. Products like bread and coffee are owned by the company, while others are sourced from FMCGs like Unilever, Pepsi, and Coca-Cola and delivered to clients last-mile.

Amin said the company expects to reduce delivery time to 20 minutes in a few months after upgrading its infrastructure. 

In summary, Breadfast wants to build “Gopuff for Africa and the Middle East.” 

Over 2,500 supermarket items are currently available to 170,000 Egyptian households. Revenue grew 4x from 2019 to 2020, according to the company.

Amin stated that the organisation expects to deliver 6 million orders in Egypt in the following year. Using the financing to expand to eight locations in Egypt, scale technology, and develop the workforce will help to achieve this.

“Breadfast will operate between 40 and 50 dark outlets in Egypt in the next several months,” said the CEO.

VNV Global investment manager Björn von Sivers remarked that Breadfast’s rise in emerging nations has been propelled by the company’s ability to provide a great customer experience and solid operational quality, which is a rare commodity in these regions.” Breadfast has the potential to become one of Africa and the Middle East’s most successful firms.”

Egyptian and sub-Saharan Africa markets will face competition similar to that seen in the United States and Europe, even if Breadfast is the most-funded local enterprise. Despite the presence of established regional competitors like InstaShop, local startups like Appetito, GoodsMart, and Rabbit are also making an impact.