🚀 Merger Announcement and Goals
In December 2023, Wasoko from Nairobi and MaxAB from Cairo announced a "merger of equals." The aim was to create better economies of scale in the B2B e-commerce sector, which has faced challenges post-COVID-19. The merger was expected to close in Q1 2024 but has been delayed due to extended due diligence and macroeconomic headwinds.
💼 Financial and Operational Challenges
Both companies are significant players, raising hundreds of millions from investors. However, delays are due to restructuring and currency devaluation. Wasoko was initially set to own 55% of the new entity, with MaxAB at 45%. This is now under review because of the Egyptian pound's devaluation in March. MaxAB needs the merger due to its depleted runway.
📉 Downsizing and Strategic Shifts
Since the announcement, Wasoko and MaxAB reduced their active countries from eight to six and laid off employees. They also reviewed ownership stakes, with talks of follow-on funding. Both companies have raised additional investment to reach profitability but are still in discussions for more funding after the merger.
🔄 Future Steps and Leadership Roles
Post-merger, Wasoko's CEO Daniel Yu will focus on investor relations and HR, while MaxAB's CEO Belal El-Megharbel will handle tech and operations. El-Megharbel has already reduced monthly burn from $2M to $500K and decreased GMV. Despite challenges, the merger process is advancing as planned, according to Wasoko.
What do you think about the Wasoko-MaxAB merger?
