Funding startups that help manufacturers and sellers deliver products and enable merchants to access them on a single platform continues to grow across Africa.
Today, a Cairo-based B2B e-commerce startup Capiter continued that trend by raising a $33 million Series A round.
The investment was led by Quona Capital and MSA Capital. Other participating investors include Savola, Shorok Partners, Foundation Ventures, Axion Venture Lab and Deraya Ventures..
Many manufacturers in Egypt today do not have the right supply chain infrastructure to reach traders. Noh says Maker can only reach 30% of traders in the market, but with Capiter, that number rises to between 80% and 100%.
In addition, a major part of the final trade of manufacturers is through traditional channels where there is basically No transparency on data or market insights.
Using machine learning, Capiter says it helps these manufacturers gain critical insight into the markets they offer, the products they sell, and how they fair with the competition..
Capiter then addresses three problems for traders. The first inconvenience is caused by merchants engaging multiple suppliers to find the right product. The second is transparency which involves some back and forth between traders and manufacturers on pricing.. The third is that traders often have little or no access to working capital to get the right products and the right timing.
With Capiter, merchants can order products from FMCGs and wholesalers, while the company delivers them. Capiter also offers fair pricing and matching technology that displays a wide range of inventory for merchants..
Then it provides them with working capital to buy more products even if they are tied with cash. To do this Capiter partners with local banks and the Central Bank of Egypt.
Capiter has over 12 merchant types on its platform, including mom-and-pop stores, hotels, restaurants, cafes, electronic shops, supermarkets, grocery stores and catering companies, each with its own customized solution..
“We are able to get data from the products they have purchased. So we provide them with the best solution as to what they should be selling, at what time and in the peak season, including when the offerings are taking place. all of In are customized The solutions we offer,” Mahmoud Noah said.
Company Revenue are derived With a small margin on products purchased from manufacturers and sold to traders. Then at a discount to the suppliers and commission from the working capital provided to the merchants. Capiter also makes money by providing market insights and data services to manufacturers and FMCGs.
In general B2B e-commerce platforms operate either an asset-light, inventory-heavy model. Noah told me that Capiter chose to use a hybrid model – Delivering without any trucks to ensure scalability and Owning inventory, especially for products with high turnover that helps the company with higher availability and better pricing.
“In this way we have been able to grow the business very fast as well, skill And strength. About this warehouse and trucks, we do not own them; We rent them. We deal with third party logistics for transportation and we manage them. “
Over 50,000 merchants and 1,000 sellers use Capiter. According to CEO Nouh, the company has provided up to 6,000 SKUs. He also said that the company is targeting annual revenue of $1 billion by next year.
“We are on a very good trajectory to achieve this,” he said. “According to Team members, at the moment we have a team of more than 1000 people including warehouse, delivery etc. So we have seen good traction across the board,” he replied when asked about the Capitor’s traction.
Kona Capital, the co-principal investor in this round, is known To place some B2B e-commerce bets in the past years, for example, Kenya’s Sokovach. The investment in Capiter adds to the firm’s portfolio in that regard and its growing presence in the MENA region is its first investigation in Egypt.
In a statement, Monica Brand Engel, Co-Founder and Managing Partner, Quona, said, “Capitor’s embedded finance model, with its expertise and strong user engagement, can have a dramatic impact on the financial lives of SMEs, enabling them to increase their income. It helps to optimize that. for communities to thrive“
“SME supply chain inefficiencies are rampant across the Middle East. we believe The main barrier is the lack of working capital in the system. Capiter built the asset-lite way gross retailers and suppliers and easy to Credit in the system through a comprehensive multi-product offering such as commerce, credit financing, digital payments, bookkeeping and inventory management for SMEs, leveraging on the ecosystem built by local banks and financial institutionsJoins Ben Harberg, partner at MSA Capital, a global VC who has invested in fintechs such as NuBank and Klarna.
According to the company’s COO, Ahmed Noah, Capitor will expand into new verticals such as agriculture and pharmaceutical offerings..
The co-founder brings experience from the shipping and logistics space. Both he and Mehmood are serial entrepreneurs. Post-work travel is quite prominent in the mobility space Co-founder and COO of Egyptian ride-hailing company SWVL. The company recently announced a potential SPAC deal, valued at $1.5 billion, and is one of the few African startups breeding a tech mafia.. Another co-founder of the company, Ahmed Sabbah, now runs early-stage fintech startup Telda.
Mahmood said Capiter has attracted a global team that brings together the expertise of companies like Careem and Flipkart needed to achieve the company’s goals..
The team, he says, combined with the provision of financial services through partnerships with banks and its hybrid model, is how the company stacks up in a competitive market, which includes Fatura, Bosta and MaxAB..
After this investment, the company’s plan v. is to expandvertical (According to buyer type) and geographically within the next year.
“We want to serve every single SME in the MENA region and expand within Egypt and globally.” He added that the Savola Group, one of its investors and the largest investor for FMCG products in the MENA region, will prove to be instrumental in this growth. Capiter also plans to diversify its financial services offering to include payments.