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Appetito, an Egyptian q-commerce platform, has acquired Lamma for more than $10 million.

appetito to lamma

Appetito, an Egyptian platform that delivers groceries and home items to consumers from 11 dark stores in three cities across the North African country, is acquiring Lamma, a similar firm with operations in Tunisia and Morocco’s Maghreb regions.

Appetito did not specify the size of the deal in its announcement, and CEO Shehab Mokhtar did not respond to an email inquiry about it. According to insiders familiar with the situation, the deal was for between $10 million and $15 million. Mokhtar remained tight-lipped about the rumored price. By the end of Q3 2022, the deal should be completed.

“From the beginning, we’ve been incredibly cost-effective with good unit economics. When questioned how Appetito funded the acquisition with only $2.5 million raised, Mokhtar stated, “The fact that we were able to do so much with so little is wonderful evidence.” “In addition, we’ll be completing an eight-figure round soon to accelerate our expansion.”

Lamma, the acquiree, established 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). Yassir El Ismaili El Idrissi, ex-GM of Careem, Hamza Guesmi, and Koussi Aymen launched Lamma, which is supported by Orange Ventures.

appetito to lamma

As both teams “explore lots of synergies,” the Lamma team, its three dark storefronts, and a distribution center will be integrated into Appetito. Appetito’s chief expansion and growth officer will be El Idrissi.

The business is to become the largest q-commerce player in frontier and emerging areas, according to the corporation. Rabbit and other similar start-ups operate in Egypt and Saudi Arabia, whereas Breadfast, which is only active in Egypt, operates more than 50 dark stores.

Since the epidemic, q-commerce platforms have attracted a lot of VC attention – and money — as consumer patterns shifted and individuals began ordering groceries online with the expectation of receiving them in minutes, as these platforms claimed.

However, as the number of platforms promising grocery and household 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.

Late last year, a consolidation began. Smaller platforms like Weezy, Cajoo, Frichti, and Dija have since been bought by larger firms like Getir, Flink, Gorillas, and Gopuff.

The purchase of Lamma by Appetito is a first in the African market, albeit among tiny players. They follow similar business concepts, with delivery times ranging from 45 minutes to two hours; Appetito also offers regular daily or weekly deliveries. The “sub 20-minute” pitch from companies like Breadfast and Rabbit differs from this timing concept.

One of the reasons Mokhtar is confident in the company’s continued growth — Appetito claims to be achieving double-digit margins — despite the downsizing and shutdowns faced by q-commerce platforms around the world is the company’s prioritization of quality and affordability over speed and convenience. Getir, Zapp, and Gorillas, for example, have reduced their workforces, while Send in Australia has closed its doors.

According to the CEO, Africa’s fragmented retail industry presents a strong business case for q-commerce models like Appetito. “We’re not just about giving convenience; we’re also about addressing massive inefficiencies in the supply chain and providing genuine value to our consumers and suppliers,” he added.

Egypt, which has a population of over 100 million people, has a $50 billion retail FMCG sector that is severely fragmented 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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Written by alex guan

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