Last year, MaxAB, a food and grocery B2B e-commerce and distribution platform that serves a network of traditional retailers in Egypt and Morocco, in its $55 million Series A in two parts; The latter was accompanied by the acquisition of Morocco-based and YC-backed WayToCap. The move shows MaxAB’s desire to dominate Egypt and North Africa’s B2B retail and e-commerce market, where Cartona and troubled Kapiter, other players, have raised significant capital in the past year to compete.
To sustain its growth and fuel expansion in the MENAP region as demand for food and groceries continues to grow, MaxAB has raised additional funding, this time a pre-Series A for $40 million.
Although the round awarded was smaller than last year, CEO Belal El Mehrbel told TechCrush that the pre-Series A round was neither low nor flat in terms of valuation. He said the company raised new capital not because it needed the money, but because “there are many opportunities that we believe we can capitalize on as quickly as we capitalize.” Asset-heavy MaxAB has raised more than $100 million in total.
Small traditional retailers form the backbone of the FMCG industry across Africa. For most B2B e-commerce platforms on the continent, retailers are just one of the many consumables they help retailers source from suppliers. For MaxAB, that’s the sweet spot. And in the year Since its launch in 2018, MaxAB has connected suppliers with more than 150,000 specialty traditional retailers in the food and grocery supply chain in Egypt and Casablanca, Morocco, placing over 2.5 million orders in this timeframe.
MaxAB’s vision of going deeper than ever with its product offerings extends to geographic expansion as well. After completing its B2B grocery supply throughout Egypt for more than three years, it intends to use its network and relationships with local and international suppliers and fully distribute to Morocco, which now accounts for 10% of MaxAB’s business, and to Saudi Arabia by the end of 2023.
The company has more than 750,000 mom-and-pop businesses in Egypt and Morocco alone seeking its services. At the same time, Saudi Arabia is appealing for the government’s efforts to digitize the informal sector and FMCG’s interest in exploring new business models.
We are trying to provide additional services to grocery stores because they are the economic base from which we operate before entering into these other supply chains. Think about Amazon; They continued to sell books for eight years before adding another category. And that’s the school of thought we want to go with,” said the CEO, who co-founded Maksaab with Mohammed Ben Halim. “In Egypt, we focused on launching the grocery supply chain and will use the lessons learned to launch in more markets. It is easier to launch a grocery supply chain in different markets, for example electronics in our core market, because it is a completely different business model that we have to learn from scratch.
Another growth stream for MaxAB is its fintech business, launched last year, which leverages its large merchant pool and processing capacity to process cash collections. And its entry approach to providing financial services differs from the competition. Instead of the BNPL product that many B2B e-commerce platforms are promoting to merchants – which has grown 5x in transaction value since the beginning of the year – it has launched a bill sum product.
It didn’t take long for MaxAB to break into the popular B2B fintech category, though; Last month, the platform launched a working capital product to the merchant base. However, like Wasoko, another B2B e-commerce platform in sub-Saharan Africa, MaxAB has not opted for debt financing to scale up its operations. According to El-Megerbel, a former general manager at Kerem, MaxAB currently gets a lot of supplier loans to help finance working capital without raising debt. “Because the buy-now is ahead of the later production, we can do some financing without incurring debt that we won’t be able to use in the short term,” the CEO added.
MaxAB’s equity round includes an impressive list of new investors: DisruptAD, ADQ’s venture capital platform; British International Investment (BII); and Menlo Park headquarters in Silver Lake — the first forays of any form into African startups. Silver Lake has invested in a long-term capital strategy with Mubadala Investment Company.
We have always prided ourselves on our ability to attract top investors to the region. Historically, since our seed round, we have had at least one VC that invested for the first time in Egypt, North Africa or Africa,” El-Megerbel said of the investment, referring to firms such as 4DX Ventures and Flourish Ventures. They participated in this round along with other existing investors, Beko Capital and Africa Platform Capital.
