South African e-commerce startup Yebo Fresh, an order-to-delivery service providing townships with fresh groceries and food, has raised a ZAR78 million (US$4.5 million) pre-Series A equity investment, as well as a Jobs Fund grant.
Launched in 2018 in the garage of founder Jessica Boonstra’s home, Yebo Fresh is an online shopping service for township communities, delivering groceries to areas that are generally unserved by most formal retailers.
The startup now delivers to more than 25 townships in the greater Cape Town and Johannesburg areas, working with a rapidly growing network of spaza shops, prepared food outlets, and other township businesses. Orders are placed via WhatsApp or through the Yebo Fresh team of field sales agents, with Yebo Fresh using a dark store-based fulfillment model to deliver orders within 24 hours. The startup also offers a buy-now-pay-later option.
While the South African upper market is well-served by quick commerce delivery services such as Checkers Sixty60 and PicknPay ASAP, Yebo Fresh says it is the only player exclusively focused on the township market.
Having raised a Series A round in 2020, plus 2021 and 2022 rounds of bridge funding from current and new investors, including AckerX, the investment vehicle of leading fast-fashion retailer Ackermans, Yebo Fresh has now raised again. Its ZAR78 million (US$4.5 million) pre-Series A round will allow the company to expand further, significantly build on its physical and systems infrastructure, and attract new talent.
“The township market is growing rapidly, and we are proud to be at the forefront of its digital revolution,” said Boonstra, Yebo Fresh’s CEO. “This funding will allow us to grow into new product categories and market segments, expand our systems and warehousing infrastructure, and explore further partnership opportunities with strategic players in the market. It will also assist us in gathering even more data insights, further strengthening our unique position in this massive market segment.”
The round was led by Enza Capital, with participation from Swiss impact investor Elea Foundation, and Harvest, the local investment fund of Endeavor. E4E Africa has also re-invested.
John Lazar, general partner at Enza Capital, said he was “thrilled” to back the “exceptional” Yebo Fresh team.
“They are fundamentally changing the way essential goods are provided to the township market, an underserved but vibrant and growing segment of the South African economy,” he said.
The Jobs Fund grant specifically will be used to provide technology, coaching, and physical resources to thousands of South African-owned businesses in townships to help them grow and remain competitive. This includes investing in digital infrastructure, providing a range of resources and free training to small business owners to improve their operations, decrease their costs and increase their sales.