Globally, food and grocery delivery startups have recently increased mega-tours, especially those in Europe, as the pandemic has resulted in more people ordering online than ever before. This growth has translated into increased volume on e-commerce platforms around the world.
While there is relatively no action in Africa in terms of by increasing investments, MENA region startups continue to generate interest, mainly in B2B e-commerce. Today, the latest is coming out of Egypt.
MaxAB, a Cairo-based startup that serves a network of traditional food and grocery retailers across Egypt, has raised $ 40 million in Series A funding.
The company, which claims to have launched in a new city every month this year, will expand its physical footprint in the Middle East and North Africa.. more, MaxAB plans to hire more talent and expand its recently launched verticals, including new supply chains and integrated finance solutions.
Founded in November 2018 by Belal El-Megharbel and Mohamed Ben Halim, the MaxAB platform manages the purchases and delivery of groceries to stores in Egypt. Store owners can use the platform to purchase goods, request delivery or logistics to move the goods and access a customer support team.
“It’s not fair the technological platform; we operate our own warehouses, we operate our own fleet. And the idea was quite simple. CEO El-Megharbel told TechCrunch. According to him, small Egyptian traders, who represent a large part of the country’s GDP, are struggling to get hold of their stocks. On the other hand, manufacturers must also suffer immensely and incur so many costs to serve a market like Egypt, where more than 400,000 small mom-and-pop stores sell 90% of the country’s groceries.
“We have seen that there is a huge role in optimizing this supply chain using technology so that we can have the right amount of product in the right place at the right time,” El-Megharbel explained, the CEO who left Careem in 2018 to start MaxAB.
He calls MaxAB the Amazon for retailing in the Middle East. There is a little comparison. In emerging markets, it can be difficult to find third-party e-commerce delivery companies to work with. Those available are either expensive or ineffective. This is why MaxAB has its own infrastructure. The company is not building warehouses from scratch. Instead, he buys them downright and rearranges them to meet his needs. After that, MaxAB uses internal technological tools to better manage the inbound, internal and outbound inventory flow of the warehouse.
El-Megharbel noted that until last year, MaxAB was focused on offering only one type of supply chain in a city. That was before and after he completed his $ 6.2 million round of funding with 9,000 merchants on his app. But with this new cycle, MaxAB consolidates both infrastructure and technology into one multiple feeding chain and multi-city company.
The new development accompanies a period of growth the company has experienced over the past two years where it now serves over 55,000 merchants and delivers over 2,000 unique products.. In terms of staff size, the company has grown more than 5 times to reach 1,600 people and is seeking to increase this number.
When it comes to integrated financing solutions, MaxAB’s plan is to offer financial services to its merchants. First of all, given the database of the company’s traders, MaxAB can predict their financial situation. By then working with banking and non-banking partners, MaxAB will provide credit facilities and equity financing to these merchants.
MaxAB’s Series A investment is one of the largest of this funding round in the MENA region. Impact investor RMBV led the round with the participation of the IFC, Thrive in companies, Crystal flow Capital city, Raise capital, and Endeavor Catalyst. Outgoing investors, Beco Capital and 4DX companies also participated. This round brings the company’s total investment to date to $ 46.2 million.
“The COVID-19 pandemic has highlighted the unique structure of the Egyptian economy, with hundreds of thousands of traders and small businesses becoming the lifeline of our country at the time of the crisis,” said the Managing Partner of RMBV Ahmed Badreldin in a statement.. “We are delighted supporting visionary entrepreneurs who have created a transformative business with impressive growth that is a catalyst for financial inclusion and job creation. We look forward to supporting MaxAB in its next phase of development as they continue to drive growth and innovation. “
The pandemic has significantly increased adoption of technology and improved economics of the business unit. As market leader, MaxAB took the opportunity to consolidate its position and scale durably in the middle of the competition.
“There is competitiveness in the Middle East. Most of them are market models but do not manage their supply chain per se. And that’s what makes our model more unique is that we own the end-to-end cycle. It’s painful, but we believe that’s what this industry, the food and grocery B2B e-commerce space needs, ”said the CEO.
After expanding into the MENA region, does the company see an opportunity southward to sub-Saharan Africa where it could face competition from Sokowatch?? “Not in the near future, ”replied El-Megharbel. “I think this market [the Middle East and North Africa] is nearly $ 200 billion a year. So we have a long way to go before going to sub-Saharan Africa.