Yebo Fresh, South African Food e-Commerce Startup Secures $4.5m in pre-Series A Round

Yebo Fresh, a South African e-commerce business that delivers fresh goods and food to townships, has secured a ZAR78 million (US$4.5 million) pre-Series A equity investment in addition to a Jobs Fund grant.

Yebo Fresh is an online grocery delivery service for township communities that was introduced in 2018 and is based in the garage of entrepreneur Jessica Boonstra’s house. It serves areas that are typically underserved by most formal merchants.

Through partnerships with a quickly expanding network of spaza stores, prepared food outlets, and other township businesses, the firm now provides delivery to more than 25 townships in the greater Cape Town and Johannesburg areas.

Yebo Fresh uses a dark store-based fulfillment mechanism to deliver orders within 24 hours. Orders can be submitted via WhatsApp or through the team of field sales agents on Yebo Fresh. Additionally, the startup provides a buy-now-pay-later alternative.

While quick commerce delivery services like Checkers Sixty60 and PicknPay ASAP are well-suited to the upper market in South Africa, Yebo Fresh asserts that it is the only competitor who focuses solely on the township market.

Yebo Fresh has raised further money after raising a Series A round in 2020, as well as bridge funding rounds in 2021 and 2022 from both old and new investors, including AckerX, the investment vehicle of well-known fast-fashion retailer Ackermans.

The company will be able to develop further, considerably improve its physical and system infrastructure, and recruit new people thanks to its ZAR78 million (US$4.5 million) pre-Series A financing.

The CEO of Yebo Fresh, Boonstra, stated that “the township market is growing quickly and we are happy to be at the forefront of its digital revolution.” “With the help of this finance, we will be able to develop into new product categories and market niches, upgrade our systems and warehouse infrastructure, and look into new business alliance options with key industry players. Additionally, it would help us gain more data insights, which will reinforce our competitive advantage in this sizable market niche.

In addition to Harvest, the local investment fund of Endeavor, and impact investor Elea Foundation from Switzerland, Enza Capital led the round. E4E Africa also made new investments.

Enza Capital managing partner John Lazar expressed his “thrilledness” to support the “amazing” Yebo Fresh team.

He said that they were fundamentally altering how necessities are delivered to the township market, which he described as an underserved but thriving and expanding sector of the South African economy.

To help thousands of South African-owned businesses in townships expand and stay competitive, the Jobs Fund award will be used to provide technology, mentoring, and physical resources.

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.