E-commerce platforms Wasoko and MaxAB have announced their merger to form a new entity aimed at supporting Africa’s $600 billion informal retail sector.
The merger, which began last December and took eight months, is the first of its kind on this scale on the African continent.
Wasoko and MaxAB used to distribute products to small shops in several African countries, but have now scaled back their operations to just five countries: Egypt, Kenya, Morocco, Rwanda and Tanzania. The move was in response to economic challenges and changing startup funding landscape in Africa.
The new entity will include a large network of informal retailers, numbering more than 450,000 merchants, with about 200,000 of them actually active. The new entity seeks to achieve profitability by expanding its services Financial Technology Which provides higher profits than traditional e-commerce.
In Egypt, the new entity's largest market, financial services generated sales of more than $180 million last year.
The two platforms have also provided over $20 million in trade financing, with a repayment rate of over 99%. The new entity hopes to double its revenue from financial services by the end of 2024.
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