YoLa Fresh, a GrubMarket for Morocco, raises $7 million to connect farmers with food sellers

The fresh produce supply chain in Africa and emerging markets faces a daily list of cascading challenges. They include environmental and labor issues, to logistical issues, from food waste to poor synchronization between supply and demand. These various issues affect stakeholders differently: farmers struggle with sales, while retailers struggle to negotiate effectively.

Several agtech startups have attempted to solve these problems by taking control of the fresh produce supply chain, cutting out the middlemen and connecting retailers and farmers directly; Frubana in Latin America, Meicai in China and Waycool in India are some examples. YoLa Fresh is one such startup that directly connects small farmers with traditional fruit and vegetable retailers, starting with Morocco.

Co-founders and co-CEOs Youssef Mamou and Larbi Alaoui Belrhiti told TechCrunch that they were inspired by those similar startups and asked their founders for advice on launching YoLa Fresh in early 2023. Now, the agricultural startup works with more than 1,000 retailers throughout the North. African country and records up to $1 million in gross merchandise volume (GMV). Such growth shown in less than a year since its launch has allowed the agritech to reach $7 million in pre-Series A financing.

The investment is significant for any African startup at this stage, even more so for one from Morocco, which recorded $93 million in total value in venture capital deals last year, according to a Partech report. The country, home to an emerging tech scene, has had some major funding rounds over the years – YC-backed B2B e-commerce platform Chari and transportation management software provider come to mind Freterium. Like these other companies, YoLaFresh’s appeal to investors extends beyond addressing a common problem in emerging markets and includes the impressive track records of its founders.

Founders with experience operating at scale in the region.

Belrhiti and Youssef, before launching YoLa Fresh, had already established impressive careers in the country’s tech scene. Alaoui founded and sold online classifieds site Avito before serving as CEO of Jumia Morocco; Mamou was the CEO of Uber’s Careem and ran 212Founders, an early-stage incubator and venture capital in Morocco.

“I come from a farming family. So, for me it made a lot of sense to build something impactful that could be internationalized, exported and launched in different countries,” said Mamou, narrating why he joined Alaoui to build YoLa Fresh after the former Jumia executive approached him with the idea. at the end of 2022.

Alaoui intended to start a small parallel farming business, but he soon recognized the significant challenges within Morocco’s fragmented agricultural supply chain, a realization that led him to address this issue rather than proceed with his initial plan. Collaborating with Mamou, the duo conducted extensive research on startups that had faced similar challenges in countries such as India, Brazil and Malaysia. After studying their models and talking to other founders, it became clear that they could use technology to digitize Morocco’s fresh produce supply chain.

“When we analyzed the Moroccan market, we found that its complexity was similar to that of other emerging markets,” Alaoui said. “Small farmers represent about 80% of agriculture, and traditional retail represents 90 to 95% of distribution. Very few people buy their fresh products in supermarkets. The supply chain here is also very fragmented, with many intermediaries, which is what we aim to solve.”

Despite its relatively small size within the region, Morocco has a robust agricultural sector, which contributes significantly to its GDP at 15%. Additionally, the nation exhibits a deeply entrenched local consumption base, with estimates suggesting that between $5 billion and $6 billion is spent annually in the traditional business sector alone. It is an accessible market that mirrors that of other African countries where smallholder farmers and traditional retailers face similar issues with multiple intermediaries involved in the supply chain, which typically spans two to seven steps.

Solve problems in the supply chain between farmers and retailers

Although YoLa Fresh plans to expand into these other markets, Morocco is the priority. By connecting farmers with retailers and food service companies, YoLa Fresh, which tracks products from farm to retail, hopes to eliminate middlemen in the food supply chain. This would allow retailers to pay less for products and ensure that farmers receive more profits quickly, thus synchronizing supply and demand in a way that minimizes waste. Additionally, YoLa Fresh uses data from both stakeholders to provide them with crop visibility and access to financing.

“Our solution offers farmers the convenience of placing their orders before midnight for delivery the next day, typically between 7 and 9 a.m., just six or seven hours later,” Mamou said. “Not only do we guarantee better quality products at the same price as the wholesale market, but our daily transactions pave the way for potential financing opportunities once we partner with financial institutions. “While we have seen a reduction in wastage, ranging from 25 to 40 percent of agricultural production, our wastage rate is around 6 to 7 percent, and we aim to reduce this further to three percent by 2026.” .

Currently, YoLa Fresh moves more than 1,200 tons monthly to customers ranging from fruit and vegetable vendors to family-owned FMCG stores. The agritech claims to record an 85% customer retention rate with an average of four weekly transactions per retailer, indicating strong customer loyalty that will help the company achieve a positive contribution margin by the end of 2024 or the end of 2024. first quarter of 2025.

Mamou said the two-year-old company hopes to execute this by doubling down on what’s already working: ensuring cash on delivery with traditional retailers, working closely with farmers to capture more margins (it has a take rate of more than 20%) and focusing intensely in unit economics. YoLa Fresh projects to reach between $40 and $50 million in annual revenue by 2026, the same year it will prepare to expand outside of Morocco. Competition in other sub-Saharan African markets includes Vendease and Complete Farmer.

Omar Laalej, CEO of Al Mada Ventures, which led YoLaFresh’s $7 million funding round, expressed confidence in the company’s ability to deliver tangible benefits to its clients in Morocco’s evolving agricultural sector. He highlighted the importance of YoLaFresh’s position in delivering value to its customers, not only in the North African country but potentially across Africa as the continent’s agricultural industry undergoes a digital supply chain transformation.

“The agricultural sector is a major contributor to economic growth and employment in our region and will benefit significantly from technological solutions. YoLa Fresh is uniquely positioned to become a leader in that transformation in Morocco and beyond,” added Tarek Assaad, managing partner of Algebra Ventures, one of the investors in the round. Other backers include E3 Capital, Janngo Capital and FMO, the Dutch Business Development Bank.

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