Fresh produce supply chains in Africa and emerging markets face cascading challenges every day. A wide range of issues are intertwined, from environmental and labor issues to logistics issues, food waste and imbalances between supply and demand. These different issues have different impacts on stakeholders. Farmers struggle to sell and retailers struggle to negotiate effectively.
Several agritech startups have attempted to solve these problems by managing the fresh produce supply chain and connecting retailers directly with farmers, without the middleman: Frubana in Latin America, Meicai in China, and Waycool in India are examples. YoLa Fresh is one such startup, starting in Morocco, that connects small farmers directly with traditional retailers of fruits and vegetables.
Co-founders and co-CEOs Yousef Mamou and Larbi Alaoui Berlitti told TechCrunch that they were inspired by similar startups and consulted by their founders to launch YoLa Fresh in early 2023. Today, the Casablanca-based agritech startup partners with over 1,000 retailers across the North African country and has seen monthly gross merchandise volume (GMV) of up to $1 million. Such growth less than a year after launch has led the agritech company to raise $7 million in pre-series A funding.
The investment is significant for African startups at this stage, but even more so for Moroccan startups, which saw venture capital deals total $93 million last year, according to a Partech report. Home to an emerging tech scene, the country has seen some big funding rounds in recent years; YC-backed B2B e-commerce platform Chari and transportation management software provider Freterium come to mind. Like these other companies, YoLaFresh is attracting investors not only because it tackles a problem prevalent in emerging markets, but also because of the impressive résumés of its founders.
Founder with experience in large-scale regional operations
Before launching YoLa Fresh, Berlitti and Youssef had already had successful careers in Morocco's tech industry: Alaoui founded and sold online classifieds site Avito before serving as CEO of Jumia Morocco, while Mamou was general manager of Uber's Careem and led Moroccan early-stage incubator and venture capital firm 212Founders.
“I come from a farming family, so it only made sense for me to create something impactful that could be internationalized, exported and rolled out in different countries,” Mamou said, explaining why he joined Alaoui to launch YoLa Fresh in late 2022 after a former Jumia executive approached him about the idea.
Alaoui intended to start a small agricultural venture as a side business, but soon realized the major challenges in Morocco's fragmented agricultural supply chain and decided to tackle the problem instead of pursuing his original plan. Working with Mamou, the pair conducted extensive research on startups that had tackled similar challenges in countries like 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.
“We looked at the Moroccan market and found that it has similar complexities to other emerging markets,” says Alaoui. “Smallholders account for about 80 percent of agriculture, and traditional retail accounts for about 90-95 percent of distribution. Almost no one buys fresh produce from supermarkets. The supply chain here is also very fragmented, with many middlemen. We are trying to solve that.”
Morocco is a relatively small country in the region, but has a robust agricultural sector that contributes 15% of GDP. Additionally, the country has a deep local consumer base, with an estimated $5-6 billion spent annually through the traditional trade sector alone. This is an addressable market similar to other African countries where smallholder farmers and traditional retailers face similar challenges with multiple intermediaries in the supply chain, typically stretching from two to seven stages.
Solving supply chain issues between farmers and retailers
YoLa Fresh plans to expand into other markets, but Morocco is a priority. Tracking produce from farm to retailer, YoLa Fresh wants to cut out the middleman in the food supply chain by connecting farmers with retailers and food service companies. This allows retailers to pay less for produce and farmers to receive more profits faster, thus synchronizing supply and demand while minimizing waste. Additionally, YoLa Fresh uses data from both stakeholders to provide visibility into harvests and access to financing.
“Our solution offers farmers the convenience of ordering by midnight and receiving the next day, usually just six to seven hours later between 7 to 9 am,” says Mamou. “Not only do we guarantee higher quality produce at the same price as in the wholesale market, but by partnering with financial institutions, we also create potential financing opportunities through daily transactions. We have seen a reduction in crop wastage of 25 to 40 percent, but our wastage rate is around 6 to 7 percent and we aim to bring it down further to 3 percent by 2026.”
YoLa Fresh currently transports over 1,200 tonnes per month to a range of clients, from fruit and vegetable distributors to independent FMCG shops. The agritech company claims to have an average of four transactions per retailer per week and a customer retention rate of 85%, indicating strong customer loyalty, which will help the company achieve positive contribution margins by the end of 2024 or Q1 2025.
Mamou said the one-year-old company wants to achieve this goal by building on existing successes: securing cash-on-delivery payments with traditional retailers, working closely with farmers to capture more margins (take rates of 20% or more), and focusing on unit economics. YoLa Fresh expects to reach $40-50 million in annual sales by 2026, the same year it will prepare to expand outside Morocco. Competitors in the sub-Saharan African market include Vendease and Complete Farmer.
Omar Larezi, Managing Director of Al Mada Ventures, who led the funding round, expressed confidence in the company's ability to deliver tangible benefits to customers in Morocco's evolving agriculture sector. He highlighted YoLaFresh's important position in delivering value to customers not only in the North African country, but potentially across Africa, as the continent's agriculture industry undergoes a digital supply chain transformation.
“The agriculture sector is a major contributor to economic growth and employment in our region and stands to greatly benefit from technology solutions. YoLa Fresh is uniquely positioned to be a leader in transformation in Morocco and beyond,” added Tarek Assad, managing partner at Algebra Ventures, one of the investors in the round. Other backers include E3 Capital, Janngo Capital, and the Netherlands Entrepreneurship Development Bank (FMO).