MaxAB, the food and grocery B2B e-commerce and distribution platform serving a network of traditional retailers across Egypt and Morocco, raised its $55 million Series A in two stages last year. The moves signaled MaxAB's ambition to dominate Egypt's and North Africa's B2B retail and e-commerce market, which includes Cartona and the troubled Capiter.
Due to the rising demand for food and groceries in the Middle East and North Africa region, MaxAB has raised more money, this time a pre-Series B to the tune of 40 million dollars.
The pre-Series B round was not a down round or a flat round in terms of valuation according to the CEO. There are many opportunities that we believe we can tap into quicker the more capitalized the company is. Over 100 million dollars has been raised by the MaxAB.
Small traditional retailers are the main players in the fast moving consumer goods industry. Groceries are one of the many consumer goods retailers can get from suppliers on most B2B e-commerce platforms. That's the sweetest spot for MaxAB. MaxAB has connected suppliers with over 150,000 unique retailers in the food and grocery supply chain in Egypt and Casablanca, delivering over 2.5 million orders within the last year.
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MaxAB believes in going deep rather than wide with its products. After scaling its B2B grocery delivery across Egypt for over three years, it intends to utilize its network and relationships with local and multinational suppliers and advance full distribution into Morocco, which now accounts for 10% of MaxAB's business.
The company estimates that hundreds of thousands of mom-and-pop businesses need its services. Saudi Arabia is appealing because of the government's drive to digitize the informal sector and the willingness to explore new business model.
Since grocery stores are the foundation of the economy we operate in, we are trying to offer more services to them. Amazon didn't add another category until eight years after they first started selling books. The CEO of MaxAB said that they like the school of thought. The grocery supply chain we launched in Egypt will be used to launch across multiple markets. It is easier to launch the grocery supply chain in different markets than it is to launch the electronics in our core market.
The fintech business launched last year is one of the growth streams for MaxAB. It launched a bill aggregation product, which has grown 5x in transaction value since the start of the year, rather than a B2B product that many B2B e- commerce platforms introduce to merchants first.
The platform launched a working capital product to its merchant base last month. MaxAB decided not to raise debt financing to scale that part of its operations. According to El-Megharbel, who was an ex-general manager at Careem, MaxAB currently gets a lot of supplier credit that helps it finance the working capital. The CEO said that because the buy now, pay later product is still early, they can still do some financing with equity.
The British International Investment and Silver Lake are the first private equity firms to invest in a startup in Africa. The Long-Term Capital strategy was invested by Silver Lake.
We are proud of our ability to attract top tier investors to the region. Since our seed round, we have always had at least one VC that has invested in Egypt, North Africa or Africa for the first time. They were part of the round along with other investors.
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