A Strategic Merger in African B2B Ecommerce
Cairo-headquartered Maxab and Nairobi-headquartered Wasoko have officially completed their merger, forming the largest network of B2B informal retailers across Africa. This merger, announced eight months ago, marks a significant milestone in the continent's ecommerce landscape, bringing together two leading players in the industry.
Leadership and Workforce
The combined entity will be led by the co-founders of Maxab and Wasoko, Belal El-Megharbel and Daniel Yu, who will serve as co-CEOs. Together, they will oversee a workforce of 4,000 employees spread across key markets, including Kenya, Tanzania, Rwanda, Egypt, and Morocco. This leadership structure aims to leverage the strengths of both companies to drive growth and innovation.
Financial Milestones and Investment History
Maxab and Wasoko have collectively raised over $230 million in total financing to date. Maxab’s last financing round, a pre-Series B, saw the company secure $40 million from US private equity firm Silver Lake. Meanwhile, Wasoko, previously known as Sokowatch, raised $125 million in a Series B round led by Tiger Global and Avenir Growth, bringing its valuation to $625 million. These significant investments underscore the confidence investors have in the future of the merged entity.
Market Presence and Growth Potential
Founded in 2015, Wasoko was a pioneer in B2B ecommerce in emerging markets, while Maxab led the way in the Middle East & North Africa. The merger combines their expertise and market presence, creating a formidable network that serves over 450,000 merchants across Africa. Egypt has emerged as the largest market for the merged entity, with $180 million in annualized sales, although the companies have not disclosed further details about their volumes or revenue.
Profitability and Fintech Integration
One of the most notable achievements of the merged entity is the profitability of its commerce division, which now generates over 10 percent of its volumes through private labels. Additionally, the integration of a fintech vertical focused on credit financing has been highly successful. Over the past year, the company has disbursed over $20 million in financing to retailers, achieving repayment rates exceeding 99%. This success highlights the strategic importance of fintech in unlocking the potential of Africa's informal retail sector.
Future Growth and Strategic Vision
The merger is expected to double the company’s revenue year-over-year by the end of this year. Daniel Yu, co-CEO, emphasized the significance of the merger in unifying the leading B2B players in North and East Africa. “This deal establishes an unmatched platform for serving communities across the continent,” Yu said. He highlighted the merged entity's integrated technology stack and Pan-African reach as key factors in driving growth beyond what either company could have achieved independently.
Building Africa’s Future: A Commitment to Innovation
Belal El-Megharbel, co-CEO, shared his vision for the merged entity's role in Africa's economic development. “This merger proves that massive, world-class tech companies can be built in Africa for Africa,” he stated. He emphasized the responsibility of the merged entity to drive the development of a mature and thriving ecosystem that will empower future companies to unlock Africa’s vast economic potential.
