Rabbit, a quick commerce startup born in Egypt, is making a bold move into the Saudi Arabian market, signaling a significant step in its regional expansion. The company, which promises grocery and other essential deliveries in as little as 20 minutes, has established its regional headquarters in Riyadh and is already operational in the Kingdom’s major cities. This expansion is supported by a fresh injection of capital from both new and existing investors, demonstrating confidence in Rabbit’s business model and its potential in the burgeoning Saudi e-commerce landscape.

Founded in Cairo in 2021 by a team of four entrepreneurs — Ahmed Yousry, Walid Shabana, Ismail Hafezz, and Tarek El Geresy — Rabbit quickly gained traction in Egypt by leveraging a network of strategically located “dark stores,” or fulfillment centers. These hubs allow the company to rapidly dispatch orders, fulfilling its core promise of speed and convenience. Over the past three and a half years, Rabbit reports having served 1.4 million customers in Egypt, delivering over 40 million items and achieving an impressive 8.5-fold revenue growth in the last two years.

Now, Rabbit is setting its sights on the Saudi market, a move the company believes holds substantial potential. Despite a large overall food and grocery market estimated at $60 billion, online grocery penetration in Saudi Arabia currently stands at a modest 1.3%. This figure lags behind the UAE (5.3%) and the US (4.8%), indicating a significant runway for growth in the digital retail space. Rabbit aims to capture a substantial share of this expanding market, setting an ambitious target of delivering 20 million items across Saudi Arabia’s major cities by 2026.

The company’s decision to prioritize Saudi Arabia aligns with the Kingdom’s Vision 2030, an ambitious plan focused on diversifying the economy, developing the retail sector, and fostering digital innovation. Rabbit’s emphasis on technology-driven efficiency and its commitment to local partnerships resonate with these national objectives. According to the company, over 60% of its suppliers are local, and its expansion strategy in Saudi Arabia will continue to prioritize collaboration with local businesses.

This expansion is being fueled by a recent funding round that has attracted notable regional investors such as Lorax Capital Partners, Global Ventures, Raed Ventures, and Beltone Venture Capital. These new backers join existing investors including Global Founders Capital, Goodwater Capital, Hub71, Simple Capital, and Foundation Ventures. While the exact amount of the latest funding has not been disclosed, the company previously raised an $11 million seed round in 2021.

Ahmad Yousry, Co-Founder and CEO of Rabbit, expressed enthusiasm about the Saudi launch. “We are delighted to announce Rabbit’s expansion into the Kingdom,” he stated. “We pride ourselves on being a hyperlocal company, bringing our bleeding-edge tech and experience to transform the grocery shopping experience for Saudi households and delivering the best products — especially local favorites — in just 20 minutes. We’re building Rabbit Saudi for Saudis by Saudi hands.”

Rabbit’s business model hinges on a sophisticated technological infrastructure. This includes AI-powered recommendations to personalize the shopping experience, streamlined warehousing with a fully digitized supply chain, a user-friendly mobile application, and hyper-efficient logistics that meticulously tracks every step of the delivery process, from warehouse picking to the final handover to the customer.

However, the quick commerce sector is not without its challenges. Maintaining profitability while ensuring rapid delivery and high customer satisfaction remains a complex equation globally. Rabbit acknowledges this challenge, stating that its success depends on balancing logistics, customer satisfaction, and sustainable unit economics — an area the company claims to be continuously refining.

Rabbit’s entry into Saudi Arabia marks a significant development in the region’s e-commerce landscape. Its proven track record in Egypt, coupled with fresh funding and a clear market opportunity in Saudi Arabia, positions the startup as a strong contender in the rapidly evolving quick commerce space. As Rabbit establishes its presence in the Kingdom, its ability to navigate the operational complexities and cater to the specific needs of Saudi consumers will be crucial in determining its long-term success.