MaxAB, an Egyptian B2B e-commerce platform for food and grocery supplies, $40 million

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Last year, MaxAB, a food and grocery B2B e-commerce and distribution platform serving a network of traditional retailers in Egypt and Morocco, raised its $55 million Series A in two phases; The latter followed with the acquisition of Morocco-based and YC-backed WaysToCap. The move signaled MaxAB’s ambition to dominate the B2B retail and e-commerce market in Egypt and North Africa, with Cartona and troubled Capitor, among other players that have raised significant capital within the past year to compete .

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In order to continue growth and fuel its expansion into the MENAP region due to increased demand for food and groceries, MaxAB has raised more funding, this time to the tune of $40 million in pre-series A.

Although smaller than last year’s prized round, CEO Belal El-Megherbel told TechCrunch that the pre-Series A was neither a down round nor a flat round in terms of valuation. He also noted that the company raised new capital, not because it needed the money, but because “there are many opportunities that we believe the more capitalized we are, the faster we can tap.” ” The asset-heavy MaxAB has raised more than $100 million in total.

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Small traditional retailers serve as the backbone of the FMCG industry across Africa. For most B2B e-commerce platforms across the continent, groceries are one of the many consumer goods that retailers help source from suppliers. For MaxAB, it’s his sweet spot. And since its launch in 2018, MaxAB has connected suppliers with more than 150,000 unique traditional retailers across this food and grocery supply chain in Egypt and Casablanca, Morocco, placing more than 2.5 million orders within this time frame Huh.

MaxAB’s approach to depth rather than being broad with its product offerings extends to how it perceives geographic expansion. After expanding its B2B grocery delivery across Egypt for more than three years, it intends to use its network and relationships with local and multinational suppliers and move to full distribution in Morocco, which is now MaxAB’s business. 10% of, and enters Saudi Arabia. end of 2023.

The company estimates that more than 750,000 mom-and-pop businesses need its services in Egypt and Morocco alone. Also, Saudi Arabia is appealing because of the government’s campaign to digitize the informal sector and FMCG’s willingness to explore new business models.

“We are trying to offer more services to grocery stores because they are the foundation of the economy that we operate in before jumping into these other supply chains. Think Amazon; He continued to sell books for eight years before adding a second category. And that is the ideology we like to go with,” said the CEO who co-founded MaxAB with Mohamed Ben Halim. “In Egypt, we focused on launching the grocery supply chain and we will use the learnings from this to launch in multiple markets. It’s easier to launch a grocery supply chain in different markets than launch, for example, electronics in our core market because it’s just a completely different business model that we have to learn anew. ,

Another growth stream for MaxAB is the fintech business launched last year, which leverages its large pool of merchants and operational efficiencies to collect cash. and its penetration approach to offering financial services sets it apart from the competition; It launched a bill aggregation product – which has increased transaction value by 5x since the beginning of the year – instead of a BNPL product that many B2B e-commerce platforms offer merchants earlier.

However, it didn’t take long for MaxAb to break into the popular B2B fintech category; Last month, the platform launched a working capital product for its merchant base. However, like Vasco, another B2B e-commerce platform based in sub-Saharan Africa, MaxAB opted not to raise debt financing to grow that part of its operations. According to El-Megherbel, who was an ex-general manager at Careem, MaxAB currently enjoys a lot of supplier credits that help finance working capital without raising debt, at least for now. “And because the Buy Now, Pay Later product is still early, we can still finance some with equity without paying for debt that we won’t be using in the short term,” the CEO said.

MaxAB’s equity round includes an impressive list of new investors: Disrupted, ADQ’s venture capital platform; British International Investment (BII); and Menlo Park-headquartered private equity firm Silver Lake – its first investigation in any form into an African startup. Silver Lake invested through its long-term capital strategy with Mubadala Investment Company.

“We have always been proud of our ability to attract top tier investors to the region. Historically, since our seed rounds, we have always had at least one VC who first took the lead in Egypt, North Africa or Africa. On the investment, El-Megharbel said, referring to firms such as 4DX Ventures and Florish Ventures. He participated in this round along with other existing investors, Biko Capital and Africa Platform Capital.

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