Egyptian Y-combinator-backed e-commerce fulfillment startup, ShipBlu, has raised $2.4 million in a Seed funding round led by Nama Ventures with participation from 1984 Ventures; Orange Ventures, the venture capital arm of Orange Telecom; Starling Ventures and other VC funds and angel investors. 

Ali Nasser, Ahmed ElKawass, Abdelrahman Hosny founded the startup in 2020. ShipBlu stores products in warehouses and delivers packages for merchants and retailers such as mom and pop stores, fashion retailers who make thousands of shipments, and international brands to consumers in Egypt. It then charges its customers per package, depending on two standard sizes, destination, and shipping speed.

ShipBlu fully launched this August and signed on more than 40 merchants during its first month. Since September, the company has managed to double its clientele while tripling revenues in the same period. Founder, Ali Nasser told TechCrunch he wants ShipBlu’s network and infrastructure to reach 99% of Egypt’s population in the next few months. “Whether you’re living in a small village or a large town or a large city, we want to be able to get to you and have the infrastructure in place to get your delivery to you,” the CEO remarked.

The ambitious goal comes from the founders’ eagerness to change an industry that has lagged behind other regions in the wider GCC, such as Saudi Arabia and the UAE, in terms of e-commerce penetration.

A significant reason this gap has always existed is that the infrastructure needed to facilitate the process of e-commerce in Egypt is abysmal. It runs deep even on an elementary level where zip codes are inaccurate or non-existent, presenting many challenges to last mile or delivery providers. The lack of accurate zip codes is one of the issues Nasser observed from Egypt’s fragmented e-commerce and fulfillment market when he returned from the US to the country months before the pandemic broke out.

The problem is so bad that 40% of deliveries fail in the country, while the global benchmark for failed deliveries is about 8%. The high rate of delivery failure makes the operating costs for over 150 providers in Egypt generally high. ShipBlu, differentiating itself from the market, says it has developed AI and ML algorithms to “reduce costs, meet delivery constraints, and refine its operating assumptions.”

The CEO says ShipBlu’s end goal is to make customers choose a three-hour delivery window for their packages and know what date to expect them, which contrasts how most traditional e-commerce fulfillment companies function.

“Roughly 56% of the time when someone in Egypt places an order online, they don’t even have a delivery date. After you place your order and you get an email confirmation, it’s complete silence until, on a random day, you’re going to get a call from the agent who’s on their way to you asking if you are available to pick up the package. We’re changing that,” he said.

ShipBlu says the investment will help grow its service offering and coverage across Egypt.