MaxAB has secured more capital, this time a $40 million pre-Series B round, to support its continued growth across the MENA region and meet the growing demand for food and supplies.
The $55 million Series A funding for MaxAB, a B2B e-commerce and distribution platform for food and grocery products that serves a network of traditional retailers in Egypt and Morocco, was raised last year in two installments. The latter followed its obtaining of the Moroccan-based and YC-backed WaysToCap.
The actions revealed MaxAB’s desire to dominate the B2B retail and e-commerce business in Egypt and North Africa, where competitors like Cartona and the financially shaky Capiter have recently raised substantial sums of money.
CEO Belal El-Megharbel noted that the pre-Series B was neither a down round nor a flat round in terms of worthwhile being smaller than last year’s prized round.
The firm obtained extra capital, he added, not because it was short on cash, but rather because “there are many possibilities that we believe we can tap into quicker the more funded we are.” MaxAB, a company with many assets, has acquired over $100 million in total.
MaxAB views growth and expansion from the same standpoint as its product offerings—going deep rather than wide.
After more than three years of expanding B2B grocery delivery throughout Egypt, MaxAB plans to use its network and connections with regional and international suppliers to advance full distribution into Morocco, which currently accounts for 10% of its business, as well as entry into Saudi Arabia by the end of 2023.
According to the corporation, just in Egypt and Morocco, more than 750,000 small enterprises need its assistance.
Saudi Arabia also appeals because of the government’s push to digitize the unorganized sector and the FMCG industry’s openness to testing out innovative business models.
The fintech company MaxAB founded last year, which utilizes its sizable merchant pool and operational capability to do cash collections, is another source of growth for the company.
And unlike the competition, it released a bill aggregation product instead of the BNPL product that many B2B e-commerce platforms introduce to merchants first. This product has increased 5x in transaction value since the year’s beginning.
MaxAB entered the well-liked B2B financial space quickly, though; last month, the platform introduced a working capital product to its merchant base.
Nevertheless, MaxAB made the decision not to obtain debt financing to scale that aspect of its operations, much as Wasoko, another B2B e-commerce platform established in sub-Saharan Africa.
El-Megharbel, a former general manager at Careem, claims that MaxAB now receives a significant amount of supplier credit, which enables it to finance the working capital without incurring debt, at least for the time being.
The CEO said, “And since the purchase now, pay later offering is still in its early stages, we can still do some financing with stock without having to pay for debt that we won’t be using in the near future.”
An excellent group of new investors joined MaxAB’s equity round, including DisruptAD, ADQ’s venture capital platform, British International Investment (BII), and Menlo Park-based private equity company Silver Lake, which is investing in MaxAB in any capacity for the first time. Silver Lake made a contribution to Mubadala Investment Company as part of its Long-Term Capital plan.
Techbuild’s Take
Egyptian e-commerce businesses are booming, and the local market is growing overall, especially in specialized fields.
The Egyptian e-commerce market has been active recently, as evidenced by the growth in the number of new e-commerce start-ups.
Many start-ups have precarious survival rates or are growing quickly and steadily, which makes them vulnerable to significant turnover.
The purchase of groceries online is becoming more and more popular among small shops. MaxAB is a distinctive online grocery chain from Egypt that has grown swiftly to become one of the biggest in the country.
The FMCG sector in Africa is mostly supported by small, local shops. Groceries are one of the numerous consumable commodities that the majority of B2B e-commerce platforms on the continent assist retailers purchase from suppliers.
That is MaxAB’s sweet spot. Additionally, over 2.5 million orders have been fulfilled by MaxAB since its introduction in 2018, connecting suppliers with over 150,000 distinct conventional retailers in the food and grocery supply chain in Egypt and Casablanca, Morocco.
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