Egyptian B2B e-commerce start-up MaxAB and Kenya-based player Wasoko are reportedly in talks to merge operations. The merger discussions arise amidst a trend of B2B e-commerce companies in Africa scaling back operations due to funding challenges.
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| Belal El-Megharbel, CEO MaxAB and Daniel Yu, CEO Wasoko. |
Egyptian B2B e-commerce start-up MaxAB and Kenya-based player Wasoko are reportedly in talks to merge operations. The merger discussions arise amidst a trend of B2B e-commerce companies in Africa scaling back operations due to funding challenges. Wasoko recently underwent significant layoffs and left markets like Senegal and Ivory Coast, while MaxAB faced financial challenges. Shared investors and the pursuit of a survival strategy led MaxAB and Wasoko to explore a merger. Other B2B e-commerce firms, such as Copia Global, Twiga, MarketForce, and Alerzo, have also scaled back operations due to funding constraints.
While Wasoko allegedly closed a $125 million round last year, the funding was tied to meeting milestones. The company refutes claims of only receiving $30 million and states they received $113 million. MaxAB, a significant player in Egypt and North Africa's B2B retail and e-commerce market, raised over $100 million. The merger could potentially reshape the B2B e-commerce landscape in Africa, combining the strengths of MaxAB's operations in Egypt and Morocco with Wasoko's presence in East Africa.
Both companies have raised substantial funding, with Wasoko securing $125 million in a Series B round from investors like Tiger Global and Avenir. MaxAB, specializing in food and grocery B2B e-commerce, raised over $100 million in previous rounds. The potential merger could create a powerhouse in the African B2B e-commerce sector, leveraging MaxAB's network and relationships with local and multinational suppliers.
MaxAB, serving over 150,000 retailers in Egypt and Casablanca, expanded its operations in Morocco. Wasoko, operating across Kenya, Tanzania, Uganda, Rwanda, Zambia, and the Democratic Republic of Congo, claims to serve over 200,000 informal retailers. The merger talks signal a strategic move in response to the challenging funding landscape, potentially creating a stronger entity capable of navigating the complexities of the African B2B e-commerce market.
Despite the challenges faced by both companies individually, their potential union may lead to a more robust and resilient presence in the African B2B e-commerce landscape. The merger talks are ongoing, and the final agreement is yet to be reached, indicating a significant development in the evolving narrative of B2B e-commerce in Africa.
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