Cairo-based Cartona, a business-to-business platform connecting retailers to manufacturers and wholesalers, said it has raised $4.5 million in a funding round led by Dubai venture capital firm Global Ventures that will allow it to invest in technology and fuel its expansion.
The early stage funding round included Kepple Africa Ventures, T5 Ventures and a group of angel investors.
Founded in August 2020, Cartona aims to solve supply chain challenges for the fast-moving consumer goods (FMCG) industry by digitalising the traditional trade market.
“The round is to enhance two aspects: our operational capabilities to expand throughout Egypt and to invest more and more in technology in order to adapt the technical capabilities needed in terms of warehouse and supply chain capabilities,” Mahmoud Talaat, Cartona’s chief executive and co-founder, told The National.
Cartona currently works with 100 FMCG companies and 1,000 suppliers and wholesalers, with more than 10,000 products listed on its application, including dry, fresh and frozen food.
Partners selling with Cartona include Egyptian brands such as Domty, Lamar and Rich Bake, and multinational brands, such as Kellogg’s and Red Bull.
The technology platform uses an asset-light model without ownership of warehouses or vehicles.
“The trade market is one of the most sophisticated, yet characterised by multiple critical inefficiencies across the value chain. Cartona’s asset-light approach tackles those inefficiencies by optimising the trade process in unique ways, and does so with minimal capital spent,” said Basil Moftah, a general partner at Global Ventures, which has invested in emerging market start-ups such as elmenus, Kitopi and Mumzworld.
Mr Talaat was previously chief commercial officer of Lamar, which sells juice and milk products, starting in 2013.
He also co-founded Speakol, a Mena-focused adtech platform serving 60 million monthly users, with chief technology officer Mahmoud Abdel Fattah in 2017.
Mr Talaat said he co-founded Cartona with Mr Abdel Fattah and Rafik Zaher after witnessing the struggles in traditional trade and “having to invest a lot in assets and people”.
He said a big chunk of Egypt’s market was conducted by “van sales”, whereby a company would fill a van with their products and go door-to-door to sell them.
“This market needs technology, because it’s completely inefficient for both suppliers and retailers, and that’s how the idea for Cartona was developed,” he said.
Cartona’s online marketplace also offers data on buyer behaviour, price competition and market share.
Since inception, Cartona has acquired more than 30,000 users in Cairo and Alexandria and processed more than 400,000 delivered orders, with an annualised gross merchandise value of 1 billion Egyptian pounds ($63.7 million).
Mr Talaat said the company plans another funding round by the third quarter of 2022, which will focus on fully integrating access to finance for retailers and suppliers.
Egypt’s start-up scene is booming, accounting for 24 per cent of deals in the Mena region in the first half of this year, according to Magnitt.
Other players in the Egyptian market trying to solve the same problem as Cartona include MaxAB, which operates its own warehouses and fleets and raised $40m in July.
Capiter uses a hybrid model, making deliveries with rented lorries and owning inventory for high-turnover products. It raised $33m earlier this month.
