Wasoko, MaxAB merger deal stalls due to ongoing restructuring
TLDR
- Nairobi-based Wasoko and Cairo-based MaxAB in talks for merger of equals, facing delays but progressing confidentially with $240M backing from investors Tiger Global, Silver Lake, Avenir, and British International Investment.
- Merger anticipated to be largest in African e-commerce, focused on strengthening market positions and capitalizing on synergies in fast-growing African e-commerce sector.
- Ongoing process involves extended due diligence, restructuring, and macroeconomic challenges, with specifics undisclosed at this time.
Nairobi-based Wasoko and Cairo-based MaxAB have been navigating a "merger of equals" for the past seven months, facing delays due to extended due diligence, restructuring, and macroeconomic challenges.
Despite these obstacles, a Wasoko spokesperson told TechCrunch that the merger is proceeding as planned, though specifics remain confidential due to the ongoing process.
The deal is expected to be the largest in African e-commerce and has secured $240 million in backing from investors such as Tiger Global, Silver Lake, Avenir, and British International Investment. The consolidation aims to bolster their market positions and leverage synergies in the rapidly growing African e-commerce sector.
Key Takeaways
Given Africa's rapidly expanding population and a scarcity of formal retail infrastructure, approximately 70% of consumables, beverages, and personal care items are distributed through local outlets or kiosks. The informal retail sector on the continent is estimated to be valued at $850 billion, and the merchants served by Wasoko and MaxAB already cater to over 65 million consumers. Both Wasoko and MaxAB are capitalizing on the emerging e-commerce market in Africa. But issues such as difficulty in securing suitable real estate, high relocation costs for managers, and inadequate infrastructure have been cited as hurdles by players in the industry.
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