After approving preliminary terms in Q4 2023, Wasoko in Kenya and MaxAB in Egypt, two of Africa’s most well-known B2B e-commerce companies, completed the largest tech merger on the continent to date.
A US $125 million Series B equity round was closed by Wasoko, formerly known as Sokowatch, in March 2022. Through a mobile app, retailers can replenish inventory for their businesses at any time, with free same-day delivery available throughout Kenya, Tanzania, Rwanda, Uganda, Zambia, and the Democratic Republic of the Congo (DRC).
Meanwhile, mom-and-pop stores and local underprivileged merchants in Egypt and Morocco can expand, boost their income, and improve their own quality of life thanks to MaxAB, which was established in 2018. In October 2022, the business concluded its own pre-Series B equity round, which raised US $40 million.
In December of last year, the media reported that the two companies had announced a “merger-of-equals” amidst difficult fundraising times in Africa. They claimed this would support the companies’ growth and development to create the most successful digital retail platform on the continent.
The historic agreement is now finalized. Through the use of an all-stock transaction, Wasoko and MaxAB transitioned from B2B e-commerce companies to a multi-vertical ecosystem supporting Africa’s US $600 billion informal retail sector. This creates a truly pan-African platform for communities to access essential digital and physical goods.
The recently established company has the largest network of B2B informal retailers on the continent, with over 450,000 merchants connected to over 65 million customers, by utilizing Wasoko and MaxAB’s vast, hyper-localized online and offline expertise throughout Kenya, Tanzania, Rwanda, Egypt, and Morocco.
The two businesses have effectively merged their tech stacks and operational processes. The combined company’s unparalleled retailer network and offerings allow for the establishment of new business units outside of e-commerce as well as the development of AI systems that power demand prediction, pricing, product selection, and route optimization through an unmatched archive of localized, high-quality data derived from millions of transactions across its individual markets.
Fintech offerings such as e-payments, credit financing, and digital service top-ups are now managed by independent business units. Additionally, e-commerce is facilitated through a single app that offers comprehensive services to informal retailers in Africa.
Together with current Wasoko and MaxAB investors, Daniel Yu, CEO of Wasoko, and Belal El-Megharbel, CEO of MaxAB, will lead the combined company, which will employ over 4,000 people. They will also function as co-CEOs and company board directors.
“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,” Yu said.
“This merger proves that massive, world-class tech companies can be built in Africa for Africa,” said Belal El-Megharbel, co-CEO at Wasoko and MaxAB. “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.”
