Egyptian q-commerce platform Appetito acquires Lamma for over $10 million

appetiteEgyptian platform, which delivers groceries and household products to customers in 11 dark stores in three cities in the North African country, is acquiring Lammaa startup operating in the Maghreb region of Tunisia and Morocco.

The transaction is expected to close by the end of the third quarter of 2022.

Appetito did not disclose the size of the deal in a statement, nor did CEO Shehab Mokhtar when asked about it by email. But sources familiar with the matter said the deal was worth between $10 million and $15 million. Mokhtar declined to comment on the speculated price.

“From day one, we achieved very cost-effective goals with stable unit economics. The fact that we were able to do so much with so little money is good evidence,” when asked how Appetito was able to When the acquisition was funded, Mokhtar replied that it raised only $2.5 million. “Furthermore, we will soon close an eight-figure financing to further facilitate our expansion.”

Acquired Lamma launched a ride-sharing service in Tunisia two years ago. It pivoted to a fast commerce platform, delivering groceries, personal care and fashion in less than 45 minutes to users in Tunisia and Morocco (launched this year). Lamma was founded by CEO Yassir El Ismaili El Idrissi, Careem, Hamza Guesmi and former general manager of Koussi Aymen, and is backed by Orange Ventures.

The Lamma team, its three dark stores and a distribution center will be integrated into Appetito as both teams “explore a lot of synergies”. El Idrissi will join Appetito as its Chief Expansion and Growth Officer.

Appetito said the deal makes it the largest q-commerce player in Africa. Its claim is based on the number of markets it currently operates in: Egypt, Morocco and Tunisia. “No other q-commerce player in Africa operates in such a large market,” Mokhtar told TechCrunch.

The company said it plans to become the largest q-commerce player in frontier and emerging markets.Similar upstarts such as rabbit Doing business in Egypt and Saudi Arabia, and old players like breakfastalthough only operating in Egypt, operates more than 50 dark shops.

Since the onset of the pandemic, with changing consumer habits and the expectation that groceries will be available in minutes, q-commerce platforms have been subject to a flood of VC interest and cash, as the platforms promised.

But as the number of platforms offering groceries and household items delivered within 20 minutes grows, it’s clear that most cannot get through their Tiny profits and questionable unit economics. Consolidation started late last year. Large companies such as Getir, Flink, Gorillas and Gopuff have acquired smaller platforms such as Wizz, cacho, Frishti and Dia.

Appetito’s acquisition of Lamma is the first of its kind in the African market, albeit among a smaller company. They use a similar model, especially with delivery times ranging from 45 minutes to 2 hours; Appetito also allows for scheduled daily or weekly deliveries. This timing model differs from “under 20 minutes” hype like Breadfast and Rabbit.

The company’s prioritization of quality and affordability over speed and convenience is one reason Mokhtar is confident in the company’s continued growth — Apetito claims double-digit profit margins — despite the global q-commerce platform facing Reduce and close. GettierZapp and gorillaFor example, they cut their workforce, while Australia’s send closure.

Africa’s fragmented retail market makes a solid business case for q-commerce models such as Appetito, the CEO said. “We’re not just about providing convenience, but addressing huge inefficiencies in the supply chain and delivering real value to our customers and suppliers,” he added.

Egypt, home to more than 100 million people, has a retail industry FMCG market size About $50 billion, and it’s highly fragmented and inefficient. The same goes for other African countries, so Appetito will be watching for expansion in these markets over the next few quarters.