Egypt’s MaxAB, an e-commerce business that connects food and grocery retailers to suppliers, said it raised $40 million in an early-stage funding round led by Netherlands-based venture capitalist RMBV to drive its regional expansion.
The company’s Series-A round also raised funds from seven other investors including the International Finance Corporation, Flourish Ventures, Crystal Stream Capital, Rise Capital and Endeavour Catalyst, MaxAB said in a statement on Monday. Existing investors Beco Capital and 4DX Ventures also participated in the round, bringing the company’s total investment to date to more than $45m.
“Being backed by a diverse group of renowned and experienced investors will enable us to rapidly scale our operations across the Middle East and North Africa region and developing markets,” Belal El-Megharbel, co-founder and chief executive of MaxAB, said. “This additional capital will allow us to continue to give retailers the economies of scale our platform offers while serving many more new customers.”
Established in 2018, MaxAB serves local independent stores across Egypt, North Africa’s largest economy. The online B2B platform offers traditional retailers the convenience of dealing with one supplier, clear pricing, on-demand delivery and value-added services, it said. On the other hand, suppliers benefit from data-driven technologies to streamline the supply chain.
MaxAB will use the funds to grow across the Mena region, following plans for expansion to every key city in Egypt by the end of 2021.
“We are looking at a number of markets with dynamics similar to Egypt, where minimal adjustments to MaxAB’s existing operating model would be required to best serve retailers, as well as more mature markets with the infrastructure in place to support rapid scalability,” the company said in response to questions from The National.
It also plans to scale recently launched business lines such as embedded finance and a broadening of its supply chains. To drive this expansion, MaxAB will grow its workforce as part of efforts to position Egypt as one of the main tech hubs in the region, it said.
Lead investor RMBV, which manages several institutional private equity funds focused on North Africa with more than $400m of invested capital, focuses on three main consumer sectors of education, health care, FMCG and the digital economy, according to its website.
“The Covid-19 pandemic has highlighted the unique structure of Egypt’s economy, with hundreds of thousands of shopkeepers and small businesses becoming the lifeline of our country at the time of crisis,” Ahmed Badreldin, managing partner at RMBV, said. MaxAB entrepreneurs have “created a transformative business with impressive growth that is a catalyst for financial inclusion and job creation”.
MaxAB serves more than 55,000 retailers, fulfilled more than one million orders and created more than 1,600 direct jobs in the past three years, according to the statement.
The business has grown more than fivefold year-on-year, fuelled by its ability to fulfil deliveries within 24 hours of orders being placed, Mr El-Megharbel said.
The company is leading a push towards embedded finance – banking-like services offered by non-banks – as part of its offerings, Ameya Upadhyay, venture partner at Flourish Ventures, said. Flourish Ventures, a $500m FinTech-focused venture firm, is backed by eBay founder Pierre Omidyar.
“MaxAB is set to play a central role in retailers’ financial lives – it directly boosts retailers’ profits by reducing the hassle and the cost of buying inventory and, with embedded FinTech products in its core offering, customers can easily buy more goods and pay for them seamlessly,” he said.
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 one fifth of every venture capital deal in the broader Mena region, according to data platform Magnitt.
MaxAB, which in Arabic means gains or returns, raised $6.2m during its seed round of investment in September 2019, according to its LinkedIn page.