The B2B e-commerce marketplace that connects informal food and grocery retailers with suppliers through an app in the capital of Egypt, MaxAB, has raised $6.2 million in seed funding in order to optimize the supply-chain network.
“Brands using MaxAB have access to real-time demand monitoring and business intelligence tools, which improve end-to-end supply chain control, and better forecasting. Retailers in remote and under-served areas will have access to a wide variety of products, the convenience of ordering stock online in addition to second-day deliveries not to mention the added benefit of access to credit facilities,” the startup said in a statement.
This is the highest ever seed round raised by a startup in North Africa and the entire Middle East and North Africa (MENA) region. This round was led by Dubai-based Beco Capital, Africa-focused 4DX Ventures, and Endure Capital, Morocco-based Outlierz Ventures, other local investors including 500 Startups. Prior to this seed round, a YC-backed Dubai-based heavy equipment rental marketplace raised $5.8 million in what was the largest seed round of MENA at the time.
Founded in November 2018 by Egyptian entrepreneur Belal El-Megharbel and Libyan entrepreneur Mohamed Ben Halim, MaxAB has built a digital platform to manage procurement and delivery of a stock list of over 600 products which include groceries, beverages, dairy, confectionery and non-food products to shops in Egypt. The startup has three apps one for store owners to purchase goods, another logistics app for its delivery fleet and the third is for its customer support team. The startup looks to close the gap between over 400,000 traditional retailers and Fast-Moving Consumer Goods (FMCG) in the North African Country.
El-Megharbel while commenting on this said, “Nobody has addressed the underserved retailers before; retailers are faced with a limited assortment of products, the hassle of dealing with multiple wholesalers and restricted access to credit facilities. At the other end of the supply chain, the FMCGs have limited visibility on market trends, demand patterns and retailers’ business needs – leading to losing potential revenue opportunities.
“We are using data and analytics to understand purchasing and retail behaviours, as well as make the end-to-end process of brands seamless and convenient. This will enable FMCGs to make informed decisions about their purchasing, which will ultimately have a positive effect on their bottom line and catalyze one of the biggest markets in Egypt. This investment round will allow us to accelerate our growth plans and develop new products and services throughout North Africa using the first of its kind B2B e-commerce platform,” he said further
According to research, within Africa, the largest consumer market in terms of the total volume is Nigeria, worth about $370 billion, followed by Egypt, South Africa, Algeria, Angola, Morocco, Sudan, and Kenya. Over the past few years, the consumer spending of Egyptians have continued to change and manufacturers and retailers have tried to keep up with this change. Currently, Egypt’s FMCG food retail market is worth $45 billion and it is faced with several bottlenecks and unmet demands. The sector’s lack of cooling chains in distribution channels and high crop wastage rates have reduced the availability of goods to customers.
With this app which automates and simplifies the value chain of the FMCG, these issues would become an issue of the past. The company which has recorded a month on month growth also revealed that ut currently has 9000 activated retailers on the platform and it has also processed over 40,000 shipments to date.
As expected from every company involved in the supply chain of FMCG El-Megharbel said that the company will scale in order to achieve profitability. “The bigger your scale the better the margins you gain on supply,” he said.
MaxAB also aims to generate revenue by expanding to its retail clients its offerings to working-capital financing and data-analytics services. It will also expand its operations to several different cities in Egypt and grow its tech team.