- Nairobi-based Wasoko and Cairo-based MaxAB's planned “merger of equals,” now seven months in the making, has reportedly faced delays due to extended due diligence, ongoing restructuring, and macroeconomic challenges.
- A Wasoko spokesperson told TechCrunch that the merger with MaxAB is proceeding as planned and on schedule, but no specifics can be shared due to the ongoing nature of the process.
- Touted as the largest in African eCommerce, investors backing the new merger with $240 million in funds include Tiger Global, Silver Lake, Avenir, and British International Investment.
Meanwhile, the deal process is considering a review of the ownership stakes, with Wasoko originally set to own 55% of the new entity and 45% of MaxAB based on revenues at the end of 2023 due to the Egyptian pound's devaluation in late Q1 2024.
However, MaxAB may agree to this because sources that speak to TechCrunch say it urgently needs the merger to close due to its severely depleted runway.
MaxAB and Wasoko agreed to a preliminary merger in December 2023 to collaborate closely in extending trade within Africa and deploying new technologies. According to the companies, the merger would enable them to serve 65 million customers in eight African markets.
The two B2B eCommerce startups allow retailers to order fast-moving consumer goods (FMCG) from suppliers using their respective apps. While both companies have yet to reveal the size of the deal, they are both significant contributors with funding totaling hundreds of millions of dollars. They have also raised funds and plan to raise additional funds after the merger.
Wasoko's website currently lists 50,000 retailers, compared to over 200,000 shop owners it serves in Kenya, Tanzania, Rwanda, Uganda, Zambia, and the Democratic Republic of the Congo.
In January 2024, the two eCommerce companies announced plans to slash 4,000 headcount by roughly 10%. In March, Wasoko shut down in Zanzibar, Tanzania and halted operations in Uganda and Zambia. Nonetheless, in April, the company denied having exited Rwanda.
Meanwhile, in March, VNV Global, a Swedish investment firm, slashed its investment value in Wasoko by 48%, dropping the company's fair value to around $260 million.
Following the merger, Wasoko CEO Daniel Yu will handle investor relations, human resources, and fundraising, while MaxAB CEO Belal El-Megharbel will oversee internal matters such as technology and operations.
