Cairo-based Maxab and Nairobi-based Wasoko have finalized their merger, culminating a process that began eight months ago, according to a joint statement released today. The merger creates the largest network of B2B informal retailers on the continent, servicing over 450,000 merchants.
Belal El-Megharbel and Daniel Yu, the co-founders of Maxab and Wasoko respectively, will lead the new entity as co-CEOs. The company now boasts a workforce of 4,000 spread across Kenya, Tanzania, Rwanda, Egypt, and Morocco.
Both companies concluded significant financing rounds at the end of 2022 before the merger. Maxab secured $40 million in a pre-Series B round led by Silver Lake, while Wasoko raised $125 million in a Series B round at a valuation of $625 million, spearheaded by Tiger Global and Avenir Growth.
Originating in 2015, Wasoko pioneered the B2B e-commerce platform in emerging markets, with Maxab being the first in the Middle East & North Africa. Together, the companies have raised more than $230 million in total funding and count Lunate, VNV Global, British International Investment, and several other prominent firms among their investors.
While the exact valuation of the merged company was not disclosed, it was noted that the merger was approximately an equal split between the two firms. Egypt remains their largest market, generating $180 million in annualized sales. Details on overall volumes and revenues were not provided.
The combined entity has found profitability within its commerce division, driven significantly by private labels, which constitute over 10 percent of their total volume.
A new fintech vertical focusing on credit financing was recently introduced, having already disbursed over $20 million to retailers, with a repayment rate surpassing 99%. This initiative underscores the role of fintech in enhancing the company’s broader strategy to maximize the potential of Africa’s informal retail sector.
Both companies anticipate doubling their revenue by the end of this year. Daniel Yu highlighted the merger as a strategic move to bridge the trade between North and East Africa, thereby creating a premier platform for serving across the continent. He emphasized the synergy resulting from their integrated technology stacks, which enhances their capability to offer diverse products and services at optimal affordability.
Belal El-Megharbel expressed that the merger underscores the potential to build massive, world-class tech enterprises within Africa that are tailored for African markets. He affirmed their commitment to pioneering the development of a robust and dynamic ecosystem, which will lay the groundwork for future enterprises to leverage Africa’s economic opportunities.
