Cairo-headquartered Maxab and Nairobi-headquartered Wasoko have completed their merger, eight months after announcing the deal, the two companies announced in a joint statement today. The merged entity will form the largest network of B2B informal retailers with more than 450,000 merchants, the statement noted.
The co-founders of Maxab and Wasoko, Belal El-Megharbel and Daniel Yu, will serve as co-CEOs of the combined entity, which will have 4,000 employees across Kenya, Tanzania, Rwanda, Egypt and Morocco.
Both the startups raised their last financing rounds towards the end of 2022. Maxab raised $40 million in a pre-Series B led by US private equity firm Silver Lake, and Wasoko (formerly Sokowatch) raised $125 million at a valuation of $625 million in a Series B round led by Tiger Global and New York-based Avenir Growth.
Started in 2015, Wasoko was one of the first B2B ecommerce platforms in emerging markets. Maxab was the first in the Middle East & North Africa.
The two companies have collectively raised over $230 million in total financing to date and also have Lunate, VNV Global, British International Investment, Beco Capital, 4DX Ventures, Quona Capital, Amplo, Breyer Capital, AHL Ventures, Endure Capital, and Flourish Ventures, on their cap tables.
They did not share any details about the valuation of the merged entity but told TechCrunch that the merger is nearly 50-50 split. The statement by the two firms stated that Egypt with $180 million in annualized sales is their largest market, without sharing further details about their volumes or revenue.
It added that that the commerce division of the combined entity is profitable now with over 10 percent of the volumes driven by the private labels.
“In the past year, the rollout of another fintech vertical focused on credit financing has disbursed over $20 million worth of financing to retailers with repayment rates exceeding 99% further demonstrating the impact of fintech within the company’s wider strategy to unlock the full potential of Africa’s informal retailers,” explained the statement.
They expect to double the revenue year-over-year by the of this year.
Daniel Yu, co-CEO at Wasoko and Maxab, commenting on the merger, said, “Building on burgeoning trade ties between North and East Africa, this deal unifies the leading B2B players in both regions, establishing an unmatched platform for serving communities across the continent.”
“Through our integrated technology stack, our expanded Pan-African reach uniquely positions us to offer the best products and services from across Africa at maximum accessibility and affordability, supercharging our growth beyond what either company could achieve independently,” he added.
Belal El-Megharbel, Co-CEO at Wasoko and Maxab, said, “This merger proves that massive, world-class tech companies can be built in Africa for Africa. As first-movers, we fully embrace our responsibility to drive the development of a mature and thriving ecosystem, building foundational infrastructure that will empower future companies to fully unlock Africa’s vast economic potential in years to come.”
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