Wasoko and MaxAB jump hoops to complete Africa's largest tech merger

In a landmark for the African tech bubble, Wasoko and MaxAB just concluded the continent’s largest tech merger. First revealed in December 2023, its consolidation marries the former’s established presence in East Africa with the latter’s dominance in North Africa, creating a humongous B2B eCommerce player.

The merger didn’t come without challenges. Regulatory complexities were a primary concern. Both companies had to navigate diverse legal landscapes across the multiple countries involved. Internal restructuring was also necessary to integrate operations and ensure a unified approach. 

Plus, mergers of this scale require substantial capital investment, and both startups faced the dual task of securing funding while managing investor expectations in a volatile economic climate. The global financial environment, marked by inflation and cautious investment trends, further complicated negotiations.

Despite these obstacles, alignment was a key driver of the merger. The now-combined entity aims to leverage its expanded geographical reach and operational capacity to enhance supply chain efficiency and improve the availability of goods across Africa. The tie-up not only strengthens the companies' market positions but also creates new growth opportunities. 

The deal's resolution demonstrates the resilience and potential of Africa’s e-commerce sector. It reflects a commitment to overcoming significant hurdles and achieving strategic objectives. 

Formerly called Sokowatch, Wasoko enables retailers to restock products at any time via a mobile app with free same-day delivery. Through the platform, shop owners purchase goods from manufacturers and distributors at competitive prices while also accessing financing through a proprietary credit scoring program. Wasoko operates across Kenya, Tanzania, and Rwanda.

MaxAB pioneered B2B e-commerce in the Middle East and North Africa. It allows underserved merchants and mom-and-pop shops in Egypt and Morocco to grow, increase their revenues, and enhance their quality of life. In addition, it runs MaxAB Payments, a service that enables local merchants to accept payments their end customers may require, and LAAS, which allows retailers to deliver B2C e-commerce shipments.

Leveraging extensive, hyper-localised online and offline expertise across Kenya, Tanzania, Rwanda, Egypt and Morocco, the newly-formed entity boasts the Africa's largest network of B2B informal retailers of more than 450,000 merchants, connected to more than 65 million consumers.

The impact of this merger on the industry will be closely monitored, with expectations that it will set new standards for scale and innovation in Africa’s tech landscape. As the newly merged entity begins its operations, it is poised to become a pivotal player in shaping the future of B2B e-commerce across the continent.

Daniel Yu, Co-CEO at Wasoko and MaxAB, says, “Building on burgeoning trade ties between North and East Africa, this deal unifies the leading B2B players in both regions, establishing an unmatched platform for serving communities across the continent. 

“Through our integrated technology stack, our expanded Pan-African reach uniquely positions us to offer the best products and services from across Africa at maximum accessibility and affordability, supercharging our growth beyond what either company could achieve independently,” Yu adds.

On his part, the man who ran MaxAB until now, Belal EL-Megharbel, believes “this merger proves that massive, world-class tech companies can be built in Africa for Africa.” 

“As first-movers, we fully embrace our responsibility to drive the development of a mature and thriving ecosystem, building foundational infrastructure that will empower future companies to fully unlock Africa’s vast economic potential in years to come.” 

Joining their strengths and resources, the two companies are positioned to address the evolving needs of the rather challenging market and drive forward the next wave of growth and innovation.