Egypt’s MaxAB and Kenya’s Wasoko complete merger of their B2B ecommerce platforms

🤝 Two of Africa’s largest B2B e-commerce platforms, Kenya-based Wasoko and Egypt-based MaxAB, have completed their merger, eight months after the deal was first announced.

• The co-founders of MaxAB and Wasoko, Belal El-Megharbel and Daniel Yu, will now serve as co-CEOs of the combined entity, which will operate with 4,000 employees across Kenya, Tanzania, Rwanda, Egypt, and Morocco.

💰 Investor lowdown: Both startups last raised funding in late 2022. MaxAB secured $40 million in a pre-Series B led by US private equity firm Silver Lake, while Wasoko (formerly Sokowatch) raised $125 million at a $625 million valuation in a Series B round led by Tiger Global and Avenir Growth.

⚙️ Break it down

Wasoko and MaxAB operate as distributors for small mom-and-pop shops across Africa and have recently expanded to offer additional financial services, such as e-payments, credit financing, and digital service top-ups.

🐂 MaxAB + Wasoko bull case (a new name is still in the works)

1. Both companies have already achieved profitability in their e-commerce operations across most markets, earning a profit per delivery.
2. The merger will allow them to combine overhead costs, which should result in immediate cost savings and increased efficiency, enhancing overall profitability.

🔮 Flashforward

The new combined company will focus on diversifying by expanding its fintech offerings in existing markets over the next year, providing a contrast to the high-volume, low-margin nature of B2B e-commerce that needs significant investment to be profitable.