$4M Later, 3M Deliveries in: Ethiopia’s beU Delivery Rides to First Taste of Profit

After nearly four years navigating Ethiopia’s nascent food delivery landscape and investing $4 million in infrastructure and operations, beU Delivery had its first profitable month in May. CEO Hao Zheng announced the major milestone for the high-burn, low-margin food delivery space last week. 

Founded in June 2021, beU began as one of the first on-demand food delivery services and has grown to dominate the sector, averaging around 4,000 orders a day. While the company has recently evolved to become a multi-vertical platform operating in several industries, food still accounted for 90% of its 3 million complete deliveries. The Startup has witnessed considerable growth in its book delivery segment, with 7,000 deliveries, while its B2B courier business has onboarded around 17 businesses in less than a year.

beU has recently introduced a Cloud Kitchen offering, allowing individuals, including home cooks and small-scale food vendors, to scale their recipes into scalable brands without the need for traditional brick-and-mortar establishments. Through an expansive delivery network of 750 personnel, the Company provides services from over 1,000 restaurants in Addis Ababa. Hao declined to comment on the exact profit figures.

Recognizable for its signature orange bicycle-riding delivery personnel, beU has established itself as the leading food delivery platform in the capital. A diverse selection of restaurants, ranging from small, local diners to high-end establishments, has given the Company an edge over its handful of competitors. Nonetheless, beU’s services remained circumscribed to the capital, like most delivery startups working in Ethiopia.

Scaling past Addis Ababa has remained challenging for most last-mile delivery service providers, partly due to high single delivery operation costs, constantly changing transport regulations, and high fuel costs. BeU’s reliance on bicycles for delivery has shielded it from high energy and maintenance costs. With the government slowly phasing out internal combustion engines, EVs, bicycles, and motorbikes are being adopted by delivery companies in their pursuit of cost-effective alternatives.

Globally, most food delivery platforms require several years to reach profitability, indicative of the tight profit margins. The timeline typically ranges from three to seven years after launch. Uber Eats, the food delivery offshoot of Uber's ride-hailing service, launched more than a decade ago, achieved its first full-year profit in 2023. 

This achievement followed years of rapid global expansion, significant investment in technology and operations while leveraging Uber’s existing rideshare infrastructure to optimize delivery efficiency.  

BeU Delivery was part of Y Combinator’s 2022 cohort and, according to Dealroom, has raised a total of $2.5 million in funding, while internal sources have indicated it’s $4 million. Its backers include Y Combinator and Goodwater Capital. 

BeU’s first profit achieved without aggressive cost-cutting is a critical milestone as the company eyes expansion into other African markets and seeks new investment to fuel that growth. 

Over the past two years, technology startups in Africa have increasingly shifted away from the traditional “burn-to-grow” model popularized by Silicon Valley. Instead of prioritizing rapid expansion at the expense of profitability, many are embracing leaner, more sustainable business strategies focused on reducing operational costs and achieving earlier breakeven points. This pivot comes amid a sharp decline in venture capital (VC) funding across emerging markets, including Africa, where funding dropped by over 50% between 2022 and 2023, according to Partech and Briter Bridges reports. 

Investors are becoming more selective, often demanding proof of profitability or a clear path to it before committing capital. This calibration is reshaping startup playbooks across the continent. African entrepreneurs are building with frugality in mind, leveraging low-cost infrastructure, tapping into local talent, and optimizing unit economics from day one.