Egypt’s MaxAB, an e-commerce business that connects food and grocery retailers to suppliers, has raised $40 million in an equity round to fund its growth in the region, hire more people and offer additional finance solutions.
The company’s pre-series B round raised funds from new investors such as technology investment company Silver Lake, British International Investment — the UK's development finance institution — and ADQ’s venture platform DisruptAD, MaxAb said on Wednesday.
The round also included participation from existing investors Beco Capital, 4DX Ventures, Flourish Ventures and Africa Platform Capital.
“We are excited about venturing into the next stage of the MaxAB journey, which is further consolidation of the informal grocery sector, heavy focus and investments in FinTech and replicating our success in new markets to grow beyond borders,” said Belal El-Megharbel, chief executive and co-founder of MaxAB.
Established in 2018, MaxAB serves local independent shops across Egypt, North Africa’s largest economy. The online B2B platform offers traditional retailers the convenience of dealing with one supplier, as well as transparent pricing, on-demand delivery and value-added services, it said.
On the other hand, suppliers benefit from data-driven technology to streamline the supply chain.
MaxAB will use the funds to expand into Morocco by the end of 2023 and enter Saudi Arabia, it said.
It also plans to use the proceeds to finance growth in the e-commerce arm of its business, expand its technology and product teams, and further scale up its FinTech unit by offering a wider range of embedded finance services, it said.
Since its launch, MaxAB's e-commerce business has served about 150,000 unique traditional retailers and delivered 2.5 million orders.
In 2021, the start-up began to extend its FinTech services across its merchant base with the goal of digitising cash flow, making MaxAB a one-stop-shop for traditional retailers, it said.
“MaxAB is building technology-driven products and services that solve for challenges around better integrated, efficient, reliable grocery supply chains for the Menap [the Middle East, North Africa, Afghanistan and Pakistan] region,” said Amer Al Ameri, head of venture capital and technology investments at ADQ.
“In digitising the vastly traditional, multilayered and fragmented food and grocery sector supply chain, they have broken the mould and presented a domino effect of opportunities, one of which is the launch of the FinTech vertical.”
In Egypt, small traditional retailers are the backbone of the grocery industry, with a similar dynamic to other markets across the Menap region.
The company estimates that there are more than 750,000 “mom-and-pop” businesses requiring its services in Egypt and Morocco while Saudi Arabia is particularly attractive due to the government's drive to digitise the informal sector and the fast-moving consumer goods industry's willingness to explore new business models, it said.
MaxAB, which in Arabic means gain or return, raised $40m during its series A round in July 2021.
It also raised $6.2m during its seed round of investment in September 2019, according to its LinkedIn page.
Egypt’s start-up scene is thriving. Start-ups in North Africa’s largest economy received a record $190m in funding last year, accounting for more than a fifth of every venture capital deal in the broader Mena region, according to data platform Magnitt.
