Fintech Expansion Prioritized over E-commerce by MaxAB-Wasoko for Profitable Growth in Africa
MaxAB-Wasoko Embraces Fintech for Growth in North and East Africa
MaxAB-Wasoko, a leading player in Africa's B2B e-commerce space, is shifting its focus towards fintech services to drive more profitable and sustainable growth. After a strategic merger, the company has evolved into a fintech-driven ecosystem, particularly leveraging digital credit and financial services for informal retailers.
In Egypt alone, MaxAB's fintech operations generate over $180 million in annual revenue. Working capital loans to small retailers have surpassed $20 million, with repayment rates exceeding 99%, thanks to a real-time credit scoring system powered by merchant transaction data.
This shift to fintech reflects a strategic response to the challenges of e-commerce, which remains a high-cost, low-margin business despite profitability in some markets. In contrast, fintech offers more predictable revenue, stronger unit economics, and higher margin potential.
To reinforce this fintech-centric growth approach, MaxAB-Wasoko has acquired the Egyptian fintech-powered marketplace Fatura. Fatura provides MaxAB-Wasoko with instant market access and a well-established fintech backbone.
MaxAB-Wasoko's regional focus involves scaling fintech services across existing markets and expanding internationally. Morocco is highlighted as a strategic area for fintech advancement, including new marketplace launches.
Other players in the African B2B e-commerce space are following a similar trend. Sabi, for instance, is pivoting towards commodity exports through its TRACE platform, driven by stronger margins and increasing global appetite for traceable products. OmniRetail is boosting profitability through the integration of credit via OmniPay, its proprietary finance solution, claiming breakeven EBIT and 5% net contribution margins.
In Nigeria, Sabi has cut 20% of its workforce as it pivots towards fintech, while OmniRetail's finance solution, OmniPay, processes $95 million monthly with non-performing loans under 0.5%.
The strategic shift of MaxAB-Wasoko, Sabi, and OmniRetail towards fintech and embedded finance is a trend within Africa's B2B e-commerce space. The takeaway is that enduring the squeeze may depend more on funding inventory than on merely transporting it.
[1] TechCrunch. (2021, March 16). MaxAB-Wasoko merges with Egyptian fintech-powered marketplace Fatura. https://techcrunch.com/2021/03/16/maxab-wasoko-merges-with-egyptian-fintech-powered-marketplace-fatura/
[2] TechCrunch. (2021, February 16). MaxAB-Wasoko acquires Egyptian fintech-powered marketplace Fatura. https://techcrunch.com/2021/02/16/maxab-wasoko-acquires-egyptian-fintech-powered-marketplace-fatura/
[3] TechCrunch. (2021, January 26). MaxAB-Wasoko evolves beyond logistics and supply chain platform for informal retailers. https://techcrunch.com/2021/01/26/maxab-wasoko-evolves-beyond-logistics-and-supply-chain-platform-for-informal-retailers/
[4] TechCrunch. (2020, October 27). MaxAB-Wasoko raises $30 million to scale its e-commerce platform for informal retailers. https://techcrunch.com/2020/10/27/maxab-wasoko-raises-30-million-to-scale-its-e-commerce-platform-for-informal-retailers/
- Recognizing the potential for more predictable revenue and higher margins, MaxAB-Wasoko is leveraging technology to expand its fintech services, not just focusing on e-commerce.
- To strengthen its fintech-centric growth strategy, MaxAB-Wasoko has integrated digital credit and financial services for businesses, beyond its initial logistics and supply chain platform.
