African B2B e-commerce Wasoko's value marked down to $260m
TLDR
- VNV Global reduces value of its holding in African B2B e-commerce startup Wasoko by 48%
- Wasoko's fair value assessed at around $260 million in December 2023
- VNV revalues its 4.2% stake in Wasoko at $10.9 million, marking a significant decrease from previous valuation
VNV Global, a Swedish investment firm specializing in backing startups in mobility, health, and marketplaces, has reduced the value of its holding in Wasoko, an African B2B e-commerce startup, by 48%, according to its annual report for 2023.
As of December 2023, VNV assessed Wasoko's fair value at around $260 million, coinciding with its announcement of its intended merger with its Egyptian counterpart, MaxAB. VNV's valuation is based on its 4.2% stake in the startup, valued at $10.9 million.
This markdown marks a notable shift from VNV's earlier valuation. In Q4 2022, VNV had valued Wasoko at $501 million, shortly after the startup secured a $125 million Series B investment co-led by Tiger Global and Avenir, resulting in a $625 million valuation. VNV Global had invested $20 million in this funding round.
Key Takeaways
B2C e-commerce remains a minuscule fraction of retail activity across Africa, accounting for less than 1% according to a study by Mastercard. Despite this, physical retailers rely on sourcing goods, and e-commerce has emerged as a popular channel for this purpose. Over the past decade, there has been a surge in funding and interest in B2B startups, with a notable uptick following the onset of COVID-19. However, in recent times, the business models of B2B e-commerce startups have encountered challenges. Issues such as challenging unit economics and high operational costs have made profitability elusive, especially in developing markets where funding opportunities are limited. This constrained funding environment has significantly shortened the runways of startups. African startups, including B2B e-commerce platforms like Wasoko, have adopted similar strategies to their counterparts elsewhere. Layoffs, cost-cutting measures, and even closures have become common strategies as these startups navigate through challenging economic conditions.
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