MaxAB, a B2B eCommerce startup based in Egypt, and Wasoko, a Kenyan eCommerce startup, have entered into preliminary merger discussions, as disclosed in a statement obtained by Techpoint Africa. The agreement signals a strategic move towards enhanced collaboration in expanding trade across Africa and integrating new technologies through the merger.
This preliminary merger agreement serves as a pivotal initial stage in the merger process, enabling the involved parties to refine details and assess compatibility. It’s important to note that this agreement is non-binding, acting as a framework for the final merger agreement.
Up until now, there has been no indication of a merger between these two startups, and previous discussions with the CEOs of both companies did not yield any comments regarding such a possibility.
Wasoko currently caters to over 200,000 shop owners in major cities across Kenya, Tanzania, Rwanda, Uganda, Zambia, and the Democratic Republic of the Congo. On the other hand, MaxAB serves more than 150,000 shop owners in Egypt and Morocco.
In light of their respective strengths, the companies envision their merger as a partnership of equals, aiming to establish Africa’s most successful digital retail platform. This potential merger positions Wasoko and MaxAB as a major force in the African tech landscape, boasting a combined customer base of over 450,000 merchants. Together, they aim to provide essential goods to more than 65 million local consumers in eight African countries.
According to the statement, both companies have experienced steady growth since the start of 2023. Wasoko has witnessed a 30% increase in monthly revenue, accompanied by a more than 20% expansion of its merchant network across Sub-Saharan Africa.
MaxAB, on the other hand, reports a 25% surge in its monthly active merchant network and a substantial 50% increase in the volume of fintech transactions.
This development is noteworthy at a time when B2B eCommerce companies in Africa are scaling back operations due to funding challenges. Wasoko, too, has faced these obstacles. In 2023, the startup reportedly underwent significant staff reductions in Kenya, including some executive positions, and ceased operations in Senegal and Ivory Coast as part of its pursuit of profitability.
Formerly known as Sokowatch, Wasoko had successfully completed a $125 million funding round the previous year, with funds contingent upon achieving predetermined goals. However, as per TechCrunch, only $30 million had been disbursed to the company at the commencement of merger discussions, with the remainder tied to meeting specific milestones.”
Contrary to the assertion, Wasoko has refuted the claim, clarifying that they received $113 million and that there was no milestone system in place for the release of funds.
Meanwhile, MaxAB has strategically leveraged its network and established partnerships with both local and international suppliers since the pre-series stage. The company is ambitiously eyeing full distribution in Morocco and plans expansion into Saudi Arabia by the year’s end.
MaxAB capitalized on an opportunity to expand its presence when a potential rival, Capiter, faced closure amid conflicts between its founders and investors. The startup entered the Moroccan market through the acquisition of YC-backed B2B platform Waystocap.
In August 2021, MaxAB secured a $15 million Series A extension round, building on the heels of a $40 million Series A raised in July of the same year.
Fast forward to November 2023, and MaxAB joined forces with Mastercard to empower businesses in Egypt. This strategic partnership is anticipated to provide digital solutions for micro, small, and medium enterprises, facilitating enhanced contactless payments for end consumers.
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