Egyptian B2B e-commerce startup MaxAB and Wasoko, a Kenya-based e-commerce player with operations in Tanzania, Rwanda, Uganda, and Zambia, are reportedly in talks to merge operations. While the terms of the deal have not been established and the agreement is yet to be finalized, the potential merger has sparked significant interest in the African B2B e-commerce landscape.
Key Takeaway
MaxAB and Wasoko, two major B2B e-commerce platforms in Africa, are in talks to merge operations. The potential merger comes at a time when B2B e-commerce companies in the region are facing funding challenges, and it could have significant implications for the African e-commerce landscape.
The Merger Talks
Sources have revealed that the merger talks are investor-led and are still ongoing. Wasoko, which recently conducted its largest round of layoffs affecting most of its employees in Kenya, has been facing challenges amid a push for profitability. The company also closed hubs in Senegal and Ivory Coast earlier in the year and left the Mombasa market.
Despite raising a substantial Series B round last year, Wasoko had only received a portion of the funding by the time the merger talks began. The company had closed the round at a post-money valuation of $625 million, with institutional investors such as Tiger Global and Avenir participating.
Company Backgrounds
MaxAB, a prominent player in Egypt’s and North Africa’s B2B retail and e-commerce market, has made significant strides, including the acquisition of YC-backed Waystocap for its expansion in Morocco. On the other hand, Wasoko, which serves a network of informal retailers across six African markets, has experienced challenges in its operations, including scaling back in certain regions and conducting layoffs.
Future Prospects
While the potential merger seemed unlikely in the past, the current discussions mark a significant shift in the strategies of both companies. MaxAB, with its extensive network and relationships with suppliers, has been eyeing expansion into Saudi Arabia, while Wasoko has been exploring opportunities in West Africa and aiming to broaden its product offerings.
