Egypt’s e-commerce platform Appetito set to acquire Lamma for US$10M

EGYPT – Appetito, the Egyptian platform that delivers groceries and family items to buyers from 11 dark stores across three cities in the North African nation, is acquiring Lamma, an identical startup with operations in the Maghreb locations of Tunisia and Morocco.

Appetito did not specify the size of the deal in its announcement. According to insiders familiar with the situation, the deal was for between US$10 million and US$15 million, with the completion of the acquisition expected to be by the end of Q3 of 2022.

Commenting on the source of funding, Shehab Mokhtar, CEO of Appetito said, “We’ve been very cost-efficient with solid unit economics from day one. The fact that we were able to do so much with so little is great evidence.” 

The acquired Lama was launched as a carpooling service in Tunisia two years ago. It shifted to a rapid commerce platform that delivers groceries, personal care, and fashion products in less than 45 minutes to people in Tunisia and Morocco (which debuted this year).

The platform was founded by Careem, Hamza Guesmi, and former GM of Koussi Aymen, CEO Yassir El Ismaili El Idrissi, and is backed by Orange Ventures.

As both teams “discover lots of synergies,” the Lamma team, its three dark storefronts, and a distribution center will be integrated into Appetito.

Appetito claims that the deal makes it Africa’s largest q-commerce player. It bases its claim on the fact that it presently operates in three markets: Egypt, Morocco, and Tunisia.

Since the outbreak of the pandemic, many q-commerce platforms have changed consumer habits, hoping that people will buy groceries online and get them in minutes as promised on these platforms.

However, as the number of platforms promising grocery and personal item delivery in under 20 minutes expanded, it became clear that most of them would fail due to their low margins and shaky unit economics.

One of the reasons Mokhtar is confident in Appetito’s continued expansion, the company promises to be reaching double-digit profits, despite the global layoffs and shutdowns of q-commerce platforms is the company’s prioritization of quality and value over ease and efficiency.

Egypt, which has a population of over 100 million people, has a US$50 billion retail FMCG sector that is severely fractured and inefficient.

Other African countries are similar, which is why Appetito plans to expand into these markets in the next months.

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