The news
- MaxAB, an Egyptian B2B e-commerce startup, and Wasoko, an e-commerce startup in Kenya, have agreed to a preliminary merger. This was revealed in a statement received Techpoint Africa.
- Wasoko and MaxAB expect to work closely together to expand trade within Africa and develop new technologies through the merger.
- The preliminary merger agreement is a critical 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 not binding and serves only as a blueprint for the final merger agreement.
So far, there has been no indication of a merger between these two startups. Earlier conversations with the CEOs of the non-startups suggested no comments about a merger.
Wasoko serving over 200,000 shop owners in major cities across Kenya, Tanzania, Rwanda, Uganda, Zambia and the Democratic Republic of Congo. However, MaxAB serves more than 150,000 shop owners in Egypt and Morocco.
The companies therefore believe that the merger of equals will enable them to create Africa’s most successful digital retail platform.
Wasoko and MaxAB, arguably Africa’s largest technology merger, will have more than 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 early 2023. Wasoko’s monthly revenue has increased by 30%, and its dealer network across Sub-Saharan Africa has grown by more than 20%.
MaxAB states that it has seen a 25% increase in its monthly active merchant network and a 50% increase in fintech transaction volume.
This news comes as B2B e-commerce companies in Africa are curtailing operations due to 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. also shut down activities in Senegal and Ivory Coast as part of its drive for profitability.
Wasoko, formerly Sokowatch, completed a $125 million funding round last year, with funds disbursed after meeting pre-set goals.
According TechCrunch, the company had received only $30 million by the time merger discussions began. The remainder was to be released as it met specified milestones.
Wasoko, however, denied this claim, stating that they received $113 million and that there was no milestone system for the release of funds.
Meanwhile, MaxAB leverages its network and partnerships with local and international suppliers from the pre-series stage. The company aims for full distribution in Morocco and expansion to Saudi Arabia by the end of the year.
When a potential rival, Capiter, closed Amid conflicts between its founders and investors, the startup expanded to Morocco acquiring Waystocap B2B platform with YC support.
In August 2021, MaxAB raised a $15 million Series A expansion round following a $40 million Series A in July of the same year.
In November 2023, Mastercard and MaxAB they joined forces to empower businesses in Egypt. This partnership is said to help micro, small and medium enterprises with digital solutions and improve contactless payments by end consumers.