RISE OF BOSTA: BRIGHTER FUTURE FOR E-COMMERCE - MENA startups, innovation, and tech news

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RISE OF BOSTA: BRIGHTER FUTURE FOR E-COMMERCE
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RISE OF BOSTA: BRIGHTER FUTURE FOR E-COMMERCE

As per a report by Bain & Co., e-commerce is expected to reach $28.5 billion in MENA by 2022 increasing from its 2019 value of $8.3 billion. Egypt, one of the most active e-commerce countries in the region, is expected to grow 33% yearly to reach $3 billion by 2022.

BOSTA TO SUPPORT E-COMMERCE

Founded in 2017 by Mohamed Ezzat, former COO of Lynks, an Egyptian e-commerce company and Ahmed Gaber, Bosta is a rising Egyptian delivery startup serving e-commerce companies with logistics and last-mile delivery. It recently raised $6.7 million in a Series A funding round, having established players on board, including Fetchr and Aramex.

PROMINENT INVESTORS

Jordanian venture capital firm Silicon Badia led the funding round along with participation from 4DX Ventures, Plug and Play Ventures, Wealth Well VC, Khwarizmi VC as well as other Saudi investors and angel investors. In 2020, Bosta had secured $1.8 million from European parcel delivery giant DPDgroup, thereby raising its funds to roughly $9 million.

THE BIRTH OF BOSTA

It was during Ezzat’s stint at Lynks, his previous consumer goods startup, that he came up with the idea of Bosta. At Lynks, he looked after logistics, international clearance and last-mile delivery. In 2016, Egypt witnessed an economic plunge along with the devaluation of the Egyptian pound and government limitation on imports. For Lynks, it surely implied slow growth but for Ezzat, it was about fixing the last-mile delivery bit which would not be easy. He realized that for e-commerce to grow, it was necessary to be supported by efficient last-mile delivery. E-commerce is a fractured market wherein 80% of transactions are done by small businesses selling on Facebook, Instagram, and social media in general. Most of these businesses fail to provide strong delivery service. With this thought he left Lynks the next year to start Bosta.

OPERATIONS AND GROWTH

With Bosta, everything is delivered to the customers’ doorstep. There are no fleet of vehicles to carry out its operations. Instead, it runs an Uber-like model where drivers register, are made contractors and are paid once a delivery is done. The company claims to have a 95% delivery success rate.

The Cairo company is looking forward to expansion into Dubai and Saudi Arabia by the end of this year and has a target to deliver over 15 million parcels in the country in the next two years. At present, Bosta is reportedly working with 3,000 businesses, including Amazon, Noon, and Jumia, carrying out around 300,000 deliveries each month in Egypt. The startup, that promises next day delivery, lets the e-commerce companies focus on selling while itself focusing on operations like exchange shipments, customer returns, cash collection, and delivery. It is said to have delivered nearly 4 million parcels to date, with 2.5 million over the last 12 months. CEO Mohamed Ezzat links this surge to COVID-19’s impact on e-commerce.

Besides small businesses, Bosta works with top e-commerce companies like Souq (Amazon company) and Jumia. Based on the volume of goods transported, Bosta charges small businesses about 35-40 Egyptian pounds, while the big companies are charged less, about 20-25 Egyptian pounds.

E-COMMERCE TO GROW IN FUTURE

GCC’s e-commerce market has always been pulled back by something whether payments, market fragmentation or customer adaption, but with the rise of companies like Bosta, who are there to tackle these issues and back e-commerce in realizing its full potential, there is definitely a brighter future for this region.

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