African Ecommerce Powerhouses MaxAB and Wasoko Ink Merger Deal, Catering To 65M Consumers in Africa

According to sources, MaxAB, an Egyptian business-to-business (B2B) e-commerce firm, and Wasoko, a Kenya-based e-commerce operator in Rwanda, Tanzania, Uganda, and Zambia, are now discussing integrating their operations. According to sources, negotiations are ongoing, and the deal must be completed.

As a result of a scarcity of available capital, business-to-business (B2B) e-commerce enterprises in Africa continue to reduce their activities on a smaller scale. Wasoko has not been an exception; it has just carried out its most extensive round of layoffs, which have impacted the majority of its workers in Kenya, including a few of the company’s officials inside the organization. At the beginning of the year, it decided to leave the markets in Senegal and Ivory Coast. It shut down hubs, including the one in Mombasa, Kenya, to increase profitability.

MaxAB, on the other hand, was facing financial difficulties and was actively looking for a survival plan as its cash reserves were being exhausted. According to several sources, MaxAB and Wasoko were actively investigating the possibility of merging with other e-commerce platforms. On the other hand, considering they both had investors, choosing to become partners was the most reasonable option given the circumstances.

Reportedly, Wasoko concluded a $125 million finance round the previous year; however, the company was supposed to distribute the funds after reaching specific objectives. Our correspondent informed us that the firm had barely garnered thirty million dollars when the merger discussions, reportedly spearheaded by investors, began. In response to this assertion, the corporation owned $113 million. It states that “there was no target system for the funds release.” Institutional investors like Tiger Global and Avenir secured the Series B round of funding for Wasoko, valuing the company at $625 million once they raised the money.

Along the same lines as Wasoko, MaxAB, a business-to-business (B2B) e-commerce and distribution platform that serves a network of conventional merchants throughout Egypt and Morocco, has successfully attracted more than $100 million; this includes a Series A investment of $55 million and a pre-Series B investment of $40 million from DisruptAD, BII, and Silverlake over the last year. The business was reportedly in discussions with its current investors to seek a bridge round of funding this year, as stated by specific sources.

MaxAB is the pivotal player in the business-to-business (B2B) retail and e-commerce industry in Egypt and North Africa. Its acquisition of YC-backed WaystoCap for expansion into Morocco and the shutdown of Capiter, a perceived threat last year, underscores its significance. A similar pattern emerges with Wasoko, positioned in East Africa.

As of the previous year, the possibility of a merger between MaxAB and Wasoko, two companies heavily invested in assets, could have been more realistic. There was no indication that either of the CEOs, Belal El-Megharbel of MaxAB and Daniel Yu of Wasoko, were contemplating a merger during the conversations that took place the previous year between the two companies. 

By the year’s conclusion, the primary objective of MaxAB’s post-pre-Series B plan was to achieve complete distribution in Morocco and expand into Saudi Arabia, which was accomplished by using the company’s network and partnerships with local and foreign suppliers. Meanwhile, Wasoko intended to investigate the possibility of expanding its operations to West Africa and increasing its products, including point-of-sale merchant systems, bill payments, and social commerce.

Although the most recent information on MaxAB’s website indicates that the company has not officially opened in Saudi Arabia, some sources assert that the firm has begun operations in the nation. Wasoko, on the other hand, has left Ivory Coast and Senegal, two West African countries it had first entered, to enhance its main activities in East African markets, including Kenya, Uganda, Tanzania, and Rwanda. Although it has left West Africa, the business-to-business (B2B) e-commerce firm, which has been in operation for seven years, has extended its operations to the Democratic Republic of the Congo and Zambia. 

Yu informed our reporter the previous month that the monthly income had increased by more than thirty percent since the beginning of 2023. Since its start, MaxAB has linked suppliers with over 150,000 different conventional merchants in this food and grocery supply chain throughout Egypt and Casablanca, according to an interview in October of last year. 

Meanwhile, Wasoko claims it provides services to more than 200,000 informal merchants throughout its six marketplaces. Both firms also offer financing products to the merchants that they service. MaxAB’s offering is a bill aggregation product. At the same time, Wasoko offers a BNPL product comparable to what many African B2B e-commerce platforms have often provided over the years.