SA online shopping service Yebo Fresh secures funding from E4EAfrica founders

Cape Town based online shopping service Yebo Fresh has announced that it has secured investment from two SA based angel investors — Bas Hochstenbach and Frederik Gerner, who are the founders of early-stage investor E4EAfrica.

Yebo Fresh said in a statement earlier today that the two investors were joined in the round by WooThemes co-founder Mark Forrester and Digital Planet CEO Neil Watson.

The startup was founded last year by serial entrepreneur Jessica Boonstra (pictured above, third from left, with her Yebo Fresh team) who is the co-founder of safety app Buzzer and Alchemize Consulting.

She said Yebo Fresh has agreed with its investors not to disclose the size of the investment round which was concluded at the end of last month.

“It’s a good size funding round that allows us to seriously expand our technology and our footprint and to grow fast in the coming months,” she added.

Yebo Fresh launched last year in Imizamo Yethu in Hout Bay, Cape Town

She said Yebo Fresh will use the funding to build brand awareness and conversion at a much bigger scale, further build its core technology, grow its logistics capacity and fine tune its product offering.

Boonstra, who has an engineering background, also has 15 years experience working in logistics at Shell. In addition, she’s also worked as a director at Ahold, one of Europe’s leading supermarkets.

Yebo Fresh provides groceries in township communities. The company said it launched operations in Imizamo Yethu, Hout Bay last September.

The startup also operates in five other locations in Cape Town, namely Hangberg, Langa, Gugulethu, Khayelitsha and Mfuleni.

The startup said it was founded with an initial investment from Professor Stefan Allesch-Taylor.

Boonstra says she was lucky to meet Allesch-Taylor around the time when she was doing consulting work and volunteering in townships.

“We got talking about an online shopping proposition for townships, and he believed in it so much that he immediately funded our first proof of concept and our first year of growth,” she added.

Boonstra said Yebo Fresh currently employs a core team of of seven people, plus a network of part-time packers, drivers and brand ambassadors.

The startup pays its brand ambassadors on commission.

Pop-up sales model

Yebo Fresh uses what it calls a “pop-up” sales model which makes use of a network of local entrepreneurs who assist customers with food orders and organising grocery delivery to easily accessible community hotspots like schools, day care centres and churches.

The startup gathers orders throughout the week, orders in large batches and delivers once a week on Saturdays. This Boontstra says allows Yebo Fresh to save on fixed costs, optimise delivery routing and reduce stock levels and waste to a minimum.

She explained that while most of its customers are smartphone users, not all familiar with the concept of shopping online.

In response to this, Yebo Fresh has introduced a paper form (which is digitised by its local agents), a WhatsApp call order service and a WhatsApp order bot.

In addition, Yebo Fresh provides a range of carefully selected product hampers and bulk size packs that Boonstra says are quick and easy to buy and offer great value.

Yebo Fresh customers and agents are also continually kept up to date on their order status through SMSs that inform them when an order has been packed or when their driver is due to arrive.

“All of the benefits of our efficient low-cost model are passed on to the customer, which allows for a competitive price point and free delivery,” she said.

Boonstra said the startup started with three locations in Imzamo Yethu and has been growing at a “steady pace” each month, both through new community locations and direct home delivery.

“We currently work with about 15 distribution points and invite any community centers, church groups, stokvel groups, health groups, day care centres, schools and other community hotspots who are interested in partnering, to contact us,” she added.

Focus on Khayelitsha and surrounding areas

Boonstra said that although the startup has been getting interest from customers all over the Western Cape and around the rest of the country, its main priority is on getting its service in its current areas right and ready to scale.

She added that Yebo Fresh will keep growing at a controlled pace and is currently mostly focused on growing its footprint in Khayelitsha and its surrounding areas.

Boonstra said she is proud to see how far the startup has come in a year, from a small proof of concept in a garage to a business with a solid offer, as well as a rapidly growing customer base and support from investors.

“The real question is no longer whether the demand is there, it clearly is, but building scale and a positive bottom line while maintaining our high service level.

“During our proof of concept phase we have been growing about 30% to 50% organically each month and have only just started our first official marketing campaigns, so we are looking forward to the next phase and to the learnings that will come with it,” said Boonstra.

Editor’s note (23 September 2010): The article has been updated to include comments from Yebo Fresh founderJessica Boonstra.

Featured image: Yebo Fresh team (Facebook)