Egyptian Food And Grocery B2B e-Commerce Startup MaxAB Raises $40 Million In Pre-Series B Funding

MaxAB is a Business-To-Business (B2B) platform that is targeted at retailers. MaxAB started in 2018 and was founded by the duo Belai El-Megharbel and Mohamed Ben Halim. What the startup does with its eponymous platform is that it provides retailers with a platform where they can purchase goods, request that these purchased goods be delivered to them at their shop, and makes the whole stocking process a lot more convenient. The startup also provides its users with a customer support team that is always available to help them resolve challenges and provide useful information.

The Egyptian startup has secured $40 million in a pre-Series B round from investors like DisruptAD, Silver Lake via its Long-Term Capital strategy with Mubadala Investment Company, and ADQ’s venture capital platform – the British International Investment (BII), 4DX Ventures, Flourish Ventures, Africa Platform Capital and Beco Capital. The round comes after its Series A funding round held in two rounds; an initial $40 million round and an extension round that saw the startup raise an additional $15 million. This extension round saw it acquire Morroco-based Business-To-Business model e-commerce and distribution startup WaystoCap, a move that showed the startup’s desire to dominate Egypt and the MENA region’s B2B retail and e-commerce market.

According to CEO Belal El-Megharbel, the new capital which is neither a round nor flat round in terms of valuation was raised not because the startup needed new capital but because “there are many opportunities that we believe we can tap into quicker the more capitalized we are.” MaxAB has, therefore, raised a total of over $100 million across funding rounds. 

Since its launch in 2018, the startup has linked suppliers with at least 150,000 different retailers in the food and grocery supply chain across Egypt, Casablanca, and Morocco. It has also delivered 2.5 million orders since 2018. MaxAB wants to use its networks and relationships with local and international suppliers to fully venture into Morocco after scaling its B2B grocery delivery across Egypt. The startup says that Morocco now accounts for 10 percent of its business, hence the need to leverage the opportunities in the country. It also plans to enter into Saudi Arabia by the end of next year.

According to its estimation, MaxAB says that at least 750,000 mom-and-pop businesses need its services in Egypt and Morocco alone, adding that it has eyes on Saudia Arabia because of its government’s desire to digitalize the informal sector as well as the willingness of the FMCG sector to try new business models.

“We’re trying to offer more services to the grocery stores since they are the foundation of the economy we operate in before jumping into these other supply chains. Think about Amazon; they kept selling books for eight years before adding another category. And that’s the school of thought we like to go with. In Egypt, we focused on launching the grocery supply chain and we’ll use the learnings that have come from that to launch across multiple markets. It’s easier to launch the grocery supply chain in various markets than launch, for example, electronics in our core market because it’s just a completely different business model that we have to relearn from scratch,” MaxAB’s CEO said. 

MaxAB’s additional fintech business which it launched last year is doing really well. This product provides merchants with the capability to conduct cash collections. Its entry into fintech is different from the competition as what it launched was a bill aggregation product instead of a BNPL product which many of its rivals offer their merchants first. This product has grown five times in transaction value since it was launched last year.

Last month, MaxAB also entered into the B2B fintech category with the aim of providing working capital to the merchants on its platform. The startup decided not to raise debt financing to scale this part of its business. According to its CEO, the startup currently receives a lot of supplier credit which helps it finance the working capital without raising debt for now. “And because the buy now, pay later product is still early, we can still do some financing with equity without having to pay for debt that we won’t be utilizing in the short term,” he added.

Speaking on the investment, CEO Belai El-Megharbel said that “We’re always proud of our ability to attract top-tier investors to the region. Historically, since our seed round, we’ve always had at least one VC that has invested in Egypt, North Africa, or Africa for the first time.”