Berlin-based Yababa only started its same-day grocery delivery business this summer, and soon after selling products for the huge Turkish and Arab communities in the capital, but in just a few months, it completed a $15.5 million seed round of financing. Rapid expansion in Germany and throughout Europe.

"Paris, Amsterdam, Brussels, London," said co-founder Ralph Hage, who made a list of preferred cities that might offer services outside of Germany.

In Germany, he said Cologne will be the next one after Berlin-where it is currently delivered to Mitte, Prenzlauer Berg, Friedrichshain, Kreuzberg, Moabit, Wedding, Neukölln, Charlottenburg, Wilmersdorf, Tiergarten, Tempelhof-Schöneberg and Lichtenberg. Year or early next year. It also hopes that the service will be available in seven cities in Germany in 2022.

Expand Yababa's product portfolio to cope with a wider mix of multicultural communities. But for now, the most popular item ordered by the startup in the German capital is Arabic bread, followed by meat, fruits and vegetables.

Although it started by focusing on Turkish and Arabic food, it sells a wide range of groceries—from fresh lemons to luncheon meats to frozen pizzas and cleaning products, just to name a few examples of the current approximately 1,500 SKUs. A wider inventory is underway.

Yababa's seed round of financing was led by Creandum and Project A. Existing investors FoodLabs and some angel investors also participated.

Although in recent months, fast commerce (or fast food groceries) has grown like weeds across Europe-this is due to the shift in the popularity of Europeans’ food buying habits from going to the store in person to (away from social) apps. The impact-based on shopping. In turn, this is an exciting regional investor. They are salivating on the prospect of disrupting traditional physical supermarkets. Therefore, funds are pouring in and investing large sums of money into speed-focused digital platforms, such as Turkey’s Getir, Glovo of Spain, Gorillas of Germany and Gopuff owned by the United States (to name a few). Convenience stores are beginning to give way to more interesting market segments-catering to the grocery needs and niche markets of specific communities.

For example, look at the London-based Oja that focuses on ethnic products — we reported on its seed round last month — or the local food producer platform Membo, an Estonian startup that gets it from Y Combinator Funding to establish a local producer that will connect shoppers with quality, to name just two examples.

Yababa said that this development is a sign of market "verification"-and also believes that, given the relative lack of competition, establishing a leading pan-European grocery shopping platform to cater to underserved multicultural communities is a huge opportunity. (By the way, "Yababa" is a casual greeting. If you go to an Arab supermarket in person, you might hear it.)

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Just in case you think that "niche" means that a market is too small and not important, Haag pointed out that in Germany itself, more than one-fifth of the population has an immigrant background (mostly Middle Easterners). There are many other large numbers of diaspora living in Western European countries-the Yababa community is preparing to expand its scale and services. 

"For our investors, our stakeholders, our customers today, we are clearly filling a huge gap," he told TechCrunch. "From an investor's point of view, this is a huge opportunity-we are one of the first participants in the market today. It has been validated in the United States by companies focused on the Asian market."

"As we continue to expand across Europe-because we see the same problems in France, the Benelux, the United Kingdom, etc.-we expand to other ethnic groups," he added. "This is how the business model has evolved."

As on-demand grocery delivery startups become more novel/professional, the demand for extreme speed as a differentiating factor will naturally decrease. Here, convenience comes from providing the products (and quality) sought, and it is difficult for your customers to obtain these products through more traditional retail (or non-professional) grocery purchase channels.

This in turn means that a platform like Yababa can manage that there may only be one centralized warehouse in each city, instead of having to fill dozens of mini black shops in one place-because the delivery commitment is usually "the next day" (not the Within a few minutes).

This means that compared to the q-commerce platform of Gorillas et al., the logistics elements look easier to streamline (and maintain). (Meaning less investor cash may be consumed). Nevertheless, in Yababa's case, it is clearly eager to expand its scale to capture other newcomers with a focus on multiculturalism, and doing so requires sufficient resources and therefore a lot of seeds.

A slower delivery model may also mean lowering the risks associated with delivery worker conditions-that is, because you are not mandating an inhumane fast turnaround time. The conditions for platform workers are an area of ​​active concern in European legislation; there is also a q-commerce platform like Gorillas and Glovo that continues to face various challenges.

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"We don't focus on speed," confirmed Hage of the grocery delivery service itself. "Basically, our USP does not revolve around the speed at which we deliver products. Of course, we think the day is very important, and we think the convenience to our customers is equally important, but we want to provide affordable services instead of charging customers a few euros Delivery fees-because we think this will cause some friction in the market."

"Our model is closer to-I would say-with AmazonFresh and Picnic. We basically allow customers to choose the delivery time and decide the delivery time-we deliver within two hours today," he continued. "Over time, this may decrease—become [more] faster [service]—or we will provide customers who want to get products faster the ability to pay for shipping. But for now, the The model is closer to AmazonFresh and Picnic."

“All the customers that we talked to — all the customers who bought from us today — value variety and value the quality of the product rather than the speed of delivery,” he added.

"We do have our own store, basically-it is a dark warehouse model-although it is larger than the fast commercial warehouse, because today we will expand our SKU from 1,500 to 5,000. And we are in the city You don’t need as many warehouses as fast commercial players."

Despite the relatively extravagant (rather) loose delivery time (as opposed to fast food/q-commerce), Yababa is still committed to maintaining control over the delivery experience. Therefore, although it purchases delivery personnel through third-party companies, it will take care of their training. Hage also stated that its goal is to recruit from its target communities in order to provide the best match between delivery personnel and customers.

At the same time, the founding team of Yababa brings a wealth of experience through past roles in the on-demand food and logistics business.

For example, Hage previously held management positions at the food delivery company Delivery Hero and digital insurance company Wefox, including co-founding NokNok, a 10-minute grocery delivery company operating in the Middle East.

He also pointed out that he himself has an immigration and Middle Eastern background and was born in Beirut.

Ralph Hage, co-founder of Yababa. Image source: Yababa

Ralph Hage, co-founder of Yababa. Image source: Yababa

Yababa’s other co-founders are also experienced in logistics: Hadi Zaklouta (also a former delivery hero); Javier Gimenez (previously at the electric scooter startup Tier Mobility); and Kamel Semakieh (whose professional history includes co-founding in Lebanon) A delivery logistics platform).

"One of the most important things today is that no one has time to learn," Hage said when asked what experience the founding team brought from their previous workplace. "Your team needs to have people who already have background knowledge. People who have done this before in the area they are focusing on today.

"So if you look at the founding team today, you will find people I know and people I have worked with in the past. So I know exactly their skills, their skill sets, how they operate, and we can be very close today. Cooperation-we have an element of trust, and we can solve problems together very well."

With the online grocery market in Europe booming due to investor cash and fierce competition (not to mention massive integration), the question is whether Yababa is building a long-term business-with a final IPO as the goal-or does it hope to exit quickly and focus on convenience One of the food application giants in China, when convenience growth slows, they may look for new market segments?

After all, Delivery Hero, an on-demand hot meal platform, has taken a piece of the gorilla — led its Series C financing last month.

"Look, if we know anything about this market-whether it's food or groceries-it will lead to consolidation," Hage said. "It has been integrating for many years. This is one of the things I did for Delivery Hero in the Middle East-as part of my responsibilities, I integrated mergers and acquisitions for them-this is something I absolutely understand. This is how I do Positioning part of the business. But my goal in establishing this company is not to sell it within a year.

"From a business perspective, this is not the most profitable or strategic decision for our stakeholders or us as a team. [This is] building a business today requires a lot of effort, and we want a household name Brand and will continue to exist for the next 10 years.

"No matter who invests in us, or who is interested in acquiring us-I think this is just a kind of trust. If we get to that stage, we will appreciate and admire it. But our goal is not to sell it within a year. This is not ours. Why investors want to work with us."

According to Hage, the large scale of seed cultivation is a measure of Yababa's first and rapid expansion ambitions.

"We hope to achieve some goals in the next round of competition. Expansion is one of them. With new capital, we plan to surpass Germany basically soon-we firmly believe that this industry has a land grab opportunity today, and we want to make sure that we are We are in a good position in meaningful cities, based on where our customers and the communities we want to target are," he said.

"We will build a network of warehouses. We want to expand our assortment. And make sure that we not only provide customers with the products they know and discover in Germany today, but also provide more exciting products that they know at home but don’t have in Germany. . Therefore, we want to focus on ensuring that we bring more and more related products over time-find out the gaps in the products and find out where to get them. Because this is the most fascinating work we do One of the eye-catching and most important parts-to provide people with products they really want but they miss at home.

"And obviously we have to expand our supply chain-from a technical point of view, from an operational point of view-and continue to grow the team. We want to hire some of the best people in Europe today. So far, we are building a wonderful culture. For us It’s important to ensure that we continue to have the culture of excellence that we had in the beginning."

Although Yababa clearly differentiates through its inventory of product portfolios, Hage said it will also take more measures to differentiate its app experience from more vanilla/western food shopping services—for example, through localized language content.

"The application itself has several different stages," he said. "Today, our operations are similar to other food delivery or grocery delivery apps-so the experience is very familiar. Nonetheless, our plan is to localize the experience, so we are now translating the audience we serve into the local language. I I think this is an extremely important element that we are trying to build-not only the application itself, but also customer service and drivers."

The application experience will also bring more differentiated flavors-but Hage temporarily kept Yababa’s plans in this regard a secret, saying: "Over time, we will build more exciting things that customers will like. Function."

"From a personal level, I have a great connection with the product I am building today," he added. "I am personally from the Middle East-I was born in Beirut during a very difficult time, and I left home very early-I started working at a very young age and moved to various countries again and again since then. I live in many Different places, and have been chasing this kind of home idea. So for me, food has always been my closest thing to home-I have always wanted to build a product where I can show the food in my area [Yes ] How special is it with groceries and different kinds of food from the Western market. So basically combining these two ideas, today we have Yababa."

Update: Peter Specht, a partner at Creandum, commented on the funding in a statement:

We have recently seen a series of rapidly emerging all-rounders and convenience grocery players, but the segment of multicultural grocery is still neglected in Europe. Just like the differentiated market in the offline world, retailer, supplier and customer demand is vertical, and we foresee the same trend on the digital side.

We are deeply impressed by the vision, expertise, and close connection with the community of the founders of Yababa, as well as their track record of high-growth startups in the food and grocery delivery space. We are proud to be able to support Ralph, Hadi, Javier and Kamel to become leaders in the European market.

In a separate statement of support, Anton Waitz, general partner of Project A Ventures, added: “Multicultural grocery stores are an underserved and very fragmented market that varies by city and region. The amazing and experienced Yababa The mission of the team is to enrich the daily lives of millions of people in Europe-not only to provide the best shopping convenience possible, but also to provide a truly unique food supply."

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