In a landmark deal, two of Africa’s leading e-commerce startups, Wasoko and MaxAB, have agreed to merge and form a new entity that will serve millions of consumers and merchants across the continent.
The merger, which is the largest tech merger in Africa, will combine the strengths and capabilities of both companies to create a dominant digital retail platform that will offer a range of technology-enabled services in e-commerce, fintech, and logistics.
Wasoko and MaxAB have a collective customer base of over 450,000 merchants, who provide essential goods to an estimated 65+ million consumers in their local communities across eight African countries: Egypt, Morocco, Kenya, Tanzania, Rwanda, Uganda, Zambia, and DR Congo.
Both companies have also achieved impressive growth and profitability in their respective markets, with Wasoko’s monthly revenue increasing by 30 per cent and its Sub-Saharan African network of merchants rising by over 20 per cent, and MaxAB’s monthly active merchant network growing by 25 per cent and its fintech transaction volumes by over 50 per cent.
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A shared vision
The merger is driven by the shared vision of both startups to transform Africa’s informal retail sector, which accounts for US$850bn of the continent’s economy. By leveraging their B2B e-commerce offerings, integrated payment solutions, merchant financing, and proprietary logistics operations, Wasoko and MaxAB aim to empower their customers and partners with efficiency, quality, and accessibility of services.
The merger will also enable the combined company to collaborate on enabling greater intra-Africa trade between their markets and implementing new technologies on a pan-African scale.
A promising future
The CEOs of both companies, Belal El-Megharbel of MaxAB and Daniel Yu of Wasoko, expressed their excitement and confidence in the merger, which they said was the culmination of years of hard work, innovation, and commitment.
They also said that they will continue to lead the company as full-time executive leaders, following the completion of the merger, which remains subject to internal approvals and other customary closing conditions.
As part of the merger transaction, the combined business has received additional investment and has substantial runway to reach profitability while pursuing new opportunities.
The merger of Wasoko and MaxAB is a historic moment for the African tech ecosystem, as it showcases the potential and impact of homegrown innovation and collaboration. The new entity will be a force to reckon with in the digital economy, and a catalyst for the development and growth of the continent.
How can the merging of Wasoko and MaxAB address challenges?
Two of the top African e-commerce businesses, Wasoko and MaxAB, share several difficulties, including restricted internet access, fragmented marketplaces, a preference for cash payments, suspicion of online purchasing, and logistical difficulties. They want to combine in order to tackle these issues in the following ways:
Increasing consciousness and trust: The merged business will benefit from the merger by developing a better reputation and brand identity that will draw and keep more merchants and consumers. The company will be able to increase its investments in marketing initiatives and consumer education as a result of the merger, educating and assuring the public about the advantages and security of online buying.
Market expansion and integration: The combination will enable the business to conduct business in eight African nations, encompassing both North and Sub-Saharan Africa. More chances for international trade, cooperation, and economies of scale and scope will result from this. The combination will also lessen the expenses and difficulties associated with conducting business by assisting in the harmonization of payment methods, legal and regulatory frameworks, and logistics operations among the various regions.
additional payment alternatives: As a result of the merger, both customers and merchants will have additional options and convenience as both businesses’ merchant financing and payment solutions will be combined. In order to encourage digital payments and financial inclusion, particularly for the unbanked and underbanked populations, the company will also make use of its fintech skills.
Enhancing affordability and accessibility to the internet: As more consumers and businesses use the online platform as a result of the merger, there will be a greater demand for and supply of internet services. Additionally, the business will collaborate with telecom companies and ISPs to enhance the availability, affordability, and quality of internet connectivity, particularly in rural and isolated locations.
Improving delivery and logistics:
The combination will combine and streamline both businesses’ delivery and logistics processes, resulting in a more dependable and effective network. To enhance the tracking, tracing, and verification of orders and shipments, the corporation will also invest in new technologies and breakthroughs including blockchain, drones, and artificial intelligence.