- MaxAB, an Egyptian B2B eCommerce startup, and Wasoko, a Kenyan eCommerce startup, have agreed to a preliminary merger. This was revealed in a statement obtained by Techpoint Africa.
- Wasoko and MaxAB anticipate close collaboration in extending trade within Africa and deploying new technologies through the merger.
- The preliminary merger agreement is a crucial first step in the merger process that allows the parties to iron out the details and determine whether or not they are a good fit. Thus, it indicates that the agreement is non-binding and only serves as a blueprint for the final merger agreement.
Until now, there has been no indication of a merger between these two startups. Previous conversations with the CEOs of no startups did not suggest any comments on a merger.
Wasoko serves over 200,000 shop owners in major cities across Kenya, Tanzania, Rwanda, Uganda, Zambia, and the Democratic Republic of the Congo. However, MaxAB serves over 150,000 shop owners in Egypt and Morocco.
Consequently, the companies believe their merger of equals will enable them to build Africa’s most successful digital retail platform.
Wasoko and MaxAB, arguably Africa's largest tech merger, will have over 450,000 merchants as a combined customer base, providing essential goods to over 65 million local consumers in eight African countries.
According to the statement, both companies have grown steadily since the beginning of 2023. Wasoko's monthly revenue has increased by 30%, and its network of merchants throughout Sub-Saharan Africa has grown by more than 20%.
MaxAB states it has seen a 25% increase in its monthly active merchant network and a 50% increase in the volume of fintech transactions.
This news comes when B2B eCommerce companies in Africa are cutting back on operations because of a lack of funding.
Wasoko has not been immune to these challenges. In 2023, the startup reportedly laid off most of its employees in Kenya, including some of its executives. It also shut down operations in Senegal and Ivory Coast as part of its quest for profitability.
Wasoko, formerly Sokowatch, completed a $125 million funding round the previous year, with funds distributed upon completion of predetermined goals.
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According to TechCrunch, the company had received only $30 million by the time merger discussions began. The rest was to be released as it met set milestones.
Wasoko, however, denied this assertion, stating that they received $113 million and that there was no milestone system in place for the release of funds.
Meanwhile, MaxAB has been leveraging its network and partnerships with local and international suppliers since the pre-series stage. The company aims for full distribution in Morocco and expansion into Saudi Arabia by the end of the year.
In August 2021, MaxAB raised a $15 million Series A extension round on the heels of a $40 million Series A in July of the same year.
In November 2023, Mastercard and MaxAB joined forces to empower businesses in Egypt. This partnership is said to help micro, small, and medium enterprises with digital solutions and enhance contactless payments from end consumers.