YFS, An Egyptian On-demand Logistics And Delivery Company, Raises $7 Million In Series A Funding

Yalla Fel Sekka (shortened as YFS), an Egyptian on-demand logistics and delivery company has raised $7 million in a Series A financing round. The funding round was led by DisruptAD and saw the participation of Kuwait-based Kharafi Group, Flybridge Ventures and I Squared Capital. The round also follows its seed round where it raised $2.5 million.

YFS was founded in 2020 (a little while before the pandemic broke out) by Khashayar Mahdavi and Yasmine Abdel Karim. Its business typically involves operating a chain of dark stores and micro-warehouses across the country.

YFS ensures quick deliveries through its chain of dark stores and mini-warehouses where businesses can store goods very close to their customers. Its B2B2C model involves integrating with the backend of a client, a supermarket for instance. Whenever a customer makes an order online, YFS picks up the order from a dark store built to keep its clients’ products and makes the delivery.

Co-founder Khashayar Mahdavi explains that “Being able to marry operational excellence and innovation with the technology to bring down your cost and have productivity gains is what sets us apart. And because of our economic and finance background, we’ve always been super focused on unit economics. So that’s what we’ve tried to achieve here, bringing innovation into this space with a focus on productivity and unit economics, and having this distributed logistics services to be able to serve our customers extremely quickly”.

YFS also offers a broad fleet and dark stores as well as micro-warehouse management serving businesses across various categories including e-commerce, pharmacies and groceries.

The platform boasts of 1,000 active drivers of vans and motorcycles and more than 3,000 on a waitlist. The company’s CEO Yasmine Abdel Karim mentioned that the company makes an average of 10,000 orders on a daily basis and that its gross merchandise volume is growing at a monthly rate of 20 percent. He also added that the company’s customer retention rate was more than 90 percent.

YFS has completed at least two million deliveries across five Egyptian cities including Cairo, Alexandria, Mansoura, Giza and Tanta, the CEO said. The company did all these while maintaining a positive gross margin in a period of 18 months.

Notably, YFS has served big names such as Jumia, Noon, Spinneys and Vezeeta. The company says that its next target of customers/clients would be businesses that are just coming online for the first time, adding that fulfilling orders would be a challenge for them.

The CEO said that “We are working on also serving multiple different businesses and even SMEs. We have a very advanced technology that will easily integrate with anyone. And that’s also a key advantage for us because we can help SMEs come online and help with their logistics arm while they focus on the product,” she said.

With the new funds, the company plans to strengthen its presence across various Egyptian cities and the Middle East and North Africa (MENA) region. It will also invest in expanding its dark store management and is looking to add between 20 and 40 dark stores in the coming year, the CEO said.

Khashayar Mahdavi says YFS is ready for a solid growth phase. “What’s important to say is anything that has to do with quick commerce or instant delivery requires a new form of infrastructure on the ground to be close to your customers, technology, operations. All of that is radically different from the type of infrastructure we saw when we were not dealing with quick commerce. But now this is what it is all about for YFS, to become the main player and the leader of offering these logistic services for commerce”, he said.

Egypt remains one of Africa’s fastest-growing economies with many platforms operating in categories of e-commerce and logistics. According to a report, on-demand delivery in the Middle East and North Africa is estimated to reach $47 billion by 2030 and YFS is one of those companies that’ll gain from this.