Egypt’s most important sector is agriculture. It accounts for more than 11% of the country’s gross domestic product (GDP), and 28% of all jobs. The sector is important, but it suffers from a complex retail supply chain, which results in low food availability, high food wastage, and inflated consumer prices.
The 2020 Egyptian Center for Economic Studies (ECES), a study that looked at fresh produce, found that the final retail price is almost twice the price it was originally sold for to farmers. Inefficient logistics is the main reason for this increase in retail prices. This forces retailers to raise prices to compensate for the cost of transportation and inventory management.
Many startups are looking to disrupt the traditional agricultural supply chain. The sector has been one of the most recent to incorporate technology in its operations. FreshSource Egypt is a startup that helps farmers connect with businesses directly without the use of intermediaries or third parties. Farah Emara and Omar Emara, sibling siblings, co-founded the startup in 2018. It has been operating since early 2019. Wamda & 4DX led the Seed Round that raised seven-figures.
“I think agritech, in general, is still gaining traction worldwide, and we’ve seen a lot of advancements throughout the industry over the past few years. Egypt will be a global agri pioneer, I believe. It is a complex and difficult field that has been overlooked. It is difficult to disrupt when working with perishable goods that have dynamic prices. FreshSource founder Omar Emara said that FreshSource has a solid foothold in the industry thanks to its cold chain expertise, which is built on the three decades of family business experience.
According to FAO, approximately 45 percent of agricultural production ends in landfills as a result of poor cold chain infrastructure.
“This was shocking to us knowing that nearly half of the fresh produce makes it to the shelves. She says that the consumer is being charged an extremely high price to compensate for this loss. We began to investigate and discovered that this is due to poor packaging, harvesting methods, storage and transport methods and poor packaging. There are materials that should not be used.
To help address the food loss issue at its core, the startup aims to serve farmers’ needs throughout the agricultural production stages, having closely witnessed challenges faced by farmers during and post-harvest phases.
FreshSource gives medium- to large-scale farmers an opportunity to get into contract farming. This will allow them to have adequate access to financing and farm input products. FreshSource purchases fresh produce directly from farmers at the time of harvest and delivers it to restaurants, hotels, and online grocery ordering platforms. FreshSource also offers last-mile connectivity to enhance logistics and storage services.
Startup connects farmers directly to businesses and vendors, thereby reducing the loss rate of food by 20 percent. This will ensure that both farmers and businesses receive the best deals, and maximize their revenue.
The company’s most recent round of funding will enable it to expand its operations across Egypt, and provide more services for farmers.
“We plan to use the funds for expansion of our team and to invest in our technology. We will also be covering all governorates of Egypt by 2023. Farah says that by 2024, we will be considering a global expansion strategy.”
FreshSource faced the greatest challenge in creating a product that could be scaled and easily accessed by farmers as well as businesses. Farah explained that users have resisted the idea of moving away from pen and papers.
“We used WhatsApp and phones to interact with users at the beginning. People could leave us a misspelled call and we would be happy to call them back. We then introduced different payment options for them to receive their wages, as well as other ways for them communicate with us. She says that this is how we will continue to rollout our tech in incremental stages.”
For Omar, being one of the first agritech startups to address food loss carries “a lot of responsibility to prove that the agriculture industry is ready for disruption. It holds incredible potential as the largest industry in Egypt and in the entire region. We will continue innovating to achieve our mission.