Yalla Fel Sekka (YFS), a Middle East and North African e-commerce and logistics company that is establishing a network of dark stores and micro-warehouses across Egypt, has received $7 million in a Series A investment.
YFS was founded by Khashayar Mahdavi and Yasmine Abdel Karim in 2020, right before the pandemic hit and customer behavior moved toward requiring speedier deliveries owing to pandemic-induced lockdown.
With rising client activity, e-commerce companies in North Africa tried to implement popular models like Gopuff, Gorillas, and Flint’s fast commerce.
However, unlike in the West, Egypt’s e-commerce infrastructure isn’t ready to handle the high demand and instability that comes with rapid commerce.
YFS is a B2B2C delivery logistics company that links with a client’s backend, such as a supermarket so that anytime a customer places an online order, the company picks it up from a dark store designed to retain its clients’ merchandise and delivers it.
The software also offers fleet management, as well as dark store and micro-warehouse management, to businesses in a variety of industries, including grocery, pharmacies, and e-commerce.
“What sets us different is our ability to integrate operational efficiency and innovation with technology to reduce costs and increase productivity,” Khashayar Mahdavi, co-founder, and chief strategy officer told TechCrunch.
“And, given our economic and financial backgrounds, we’ve always placed a strong emphasis on unit economics.”
“So that’s what we’ve attempted to do here: bring innovation into this field while focusing on productivity and unit economics, and use distributed logistics services to serve our clients really quickly.”
YFS maintains a fleet of 1,000 active motorcycle and van drivers, with another 3,000 on the waiting list.
According to CEO Abdel Karim, these drivers complete 10,000 orders every day, and the company’s gross merchandise volume is rising at a monthly pace of 20%, with a customer retention rate of over 90%.
She further claimed that in just 18 months, YFS has performed two million deliveries in five Egyptian cities — Cairo, Giza, Alexandria, Mansoura, and Tanta — all while maintaining a positive gross margin.
Flybridge Ventures and I Squared Capital provided $2.5 million in seed funding to the founders, who have worked in investment banking and oil and gas.
These investors, including lead investor DisruptAD, ADQ’s venture platform, and Kuwait-based Kharafi, funded the company again in this round.
The new funds will be used to increase YFS’s presence in cities across Egypt and the MENA region. Abdel Karim added that the company would improve its dark store management as it plans to open 20 to 40 dark stores this year.
For Mahdavi, the company will begin a robust growth phase now that it has a proof of concept.
“What’s crucial to note is that anything involving quick commerce or instant delivery necessitates a new type of ground infrastructure to be proximate to your customers, technology, and operations,” he said.
“All of that is in stark contrast to the infrastructure we saw when we weren’t dealing with fast trade.” But today, for YFS, it’s all about becoming the major player and leader in providing these logistics services for commerce.”