South Africa's Pargo expands into Egypt following a $4 million funding boost

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October 24, 2024
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2 min read
Pargo
  • Pargo, a South African eCommerce logistics startup, has announced its expansion into Egypt after securing $4 million in funding.
  • 3Capital Ventures (previously part of Allan Gray), Endeavor, SAAD Investment Holdings and UW Ventures led the funding round. 
  • The startup has launched its collect and return services at over 500 Pargo Points in Egypt, aiming to use the funding to accelerate growth in the country's eCommerce sector. 

The Egyptian eCommerce market size has grown significantly in the last few years and is expected to grow even more. 

Driven by rising Internet penetration, improved infrastructure, and an increased number of online shoppers, the eCommerce market size is estimated at $9.05 billion in 2024 and expected to reach $18.04 billion by 2029, growing at a CAGR of 14.80% during the forecast period (2024-2029). 

Lars Veul, CEO of Pargo, acknowledged the potential of the Egyptian market and stated that the expansion is a significant step towards establishing the region's largest smart logistics network. 

Despite the growing adoption of eCommerce in Africa, a GSMA study highlights significant challenges with logistics and delivery processes and services, such as damaged goods during delivery, insufficient delivery capacity when needed, and slow delivery times. These challenges are said to increase costs and reduce the revenue generated from online sales. 

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However, Veul said the startup aims to provide affordable eCommerce delivery solutions to increase access to online shoppers across Africa that eCommerce companies currently struggle to service.

Lars Veul and Derk Hoekert founded Pargo in 2015 as a smart logistics company that provides eCommerce delivery solutions via its network of over 4000 tech-enabled Pargo Points. It has reportedly connected companies like Amazon, Bash and Jumia with large online shoppers. 

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The startup initially launched a pilot in Egypt in 2023, establishing 150 Pargo Points to test its solution with some eCommerce companies and their online shoppers. It also introduced a new "Cash on Collection" payment option. 

Subsequently, Pargo aims to expand to 7,000 pickup points across the region by 2026 while maintaining partnerships with local businesses and brands. 

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