Ugandan startup Minute5, which has developed a grocery delivery platform, now has hundreds of returning users having bootstrapped its business from the ground up.
Minute5 came about in 2018, after Jonathan Paul Katumba and his co-founder realised that customers needed a more convenient way of getting groceries.
“We initially started out by selling passion fruits from my co-founder’s farm to people working in offices uptown,” Katumba told Disrupt Africa.
“We developed a web platform in 2019 where customers could order the groceries they wanted and then we would deliver them affordably and quickly.”
This has grown exponentially, with Minute5 now having 500 registered customers, spending an average of US$20 on a weekly basis. Katumba attributes the strong uptake to the real need the startup is solving.
“Customers didn’t have an affordable and quick way of getting high quality groceries. Customers would spend more than four hours going to the market to buy food, and this was where we found an opportunity to make people’s lives easier. The option that was there, Jumia, was too slow and too expensive for the ordinary middle class household, so we came in to fix that,” he said.
The startup has done that without much external funding. It bootstrapped from the beginning, before taking on some grant and pre-seed capital from the likes of MTN Uganda and the 97Fund.
“With these funds we have been able to deliver to more than 1,000 customers and ensure that they are satisfied with service. We have also started the process of opening our first retail outlet that will improve our sourcing and support more small food businesses,” said Katumba.
Business has got even better in the wake of the COVID-19 pandemic, as lockdowns forced people online.
“We were able to get a good number of customers to use our service and even remain our customers after that. We are more than certain that we have the highest retention rate for any e-commerce platform and we plan to keep it this way such that we serve more customers and offer them convenience,” Katumba said.
For now only active in Kampala, Minute5 nonetheless has broader plans.
“We hope to expand to other regions of the country, and later expand to other African countries. Currently, we are setting up our retail outlets which are essential dark stores that we shall use to fulfill orders of our consumers and businesses,” said Katumba.
Minute5 sources groceries from small scale farmers and markets, and then sells them to its customers, with a margin of between 15 and 30 per cent on every product.
“This also gives us the liberty to pay the small scale farmers fairly since today they are cheated by middlemen,” Katumba said.
Lack of investment, however, remains a hindrance to the startup’s ambitions.
“Today the biggest challenge is the lack of funding to help us accelerate our growth. If we could have angel investors coming in to invest in the business, we know that our growth will be accelerated,” said Katumba.