Fintech Ventures pioneered by MaxAB-Wasoko. Profitable expansion in Africa prioritized over online commerce.
In a strategic move, MaxAB-Wasoko, a leading B2B e-commerce company in Africa, has shifted its focus towards fintech to boost profitability, particularly in North and East Africa. This decision reflects a broader sector-wide realization that embedding financial services, especially credit and payment solutions tailored for informal retailers, is crucial to unlocking sustainable growth and profitability in Africa's B2B e-commerce ecosystem.
MaxAB's acquisition of the fintech-powered marketplace Fatura has been instrumental in this transformation. The move has granted EFG Finance, a branch of regional giant EFG Holding, a board seat at MaxAB-Wasoko, strengthening the group's financial base. Fatura's model fits seamlessly with MaxAB's logistics-driven infrastructure, introducing a scalable and asset-light fintech layer that leverages the group's existing distribution reach.
MaxAB-Wasoko's fintech operations in Egypt are now generating more than $180 million in annual revenue, a testament to the success of this strategic shift. The company's primary focus in its fintech operations is on scaling financial services as its primary growth driver across its markets. This includes issuing working capital loans to thousands of small retailers, with a repayment rate exceeding 99%, powered by a real-time credit scoring system derived from transaction data on its platform.
The transition towards financial services in Africa’s B2B e-commerce sector is driven by the challenging economics of e-commerce. Despite rapid expansion, it remains a high-cost, low-margin business with difficult scalability and profitability. Fintech offers more predictable revenue streams and stronger unit economics with significantly higher margins. The financial services pivot also leverages rich transaction data from merchants, enabling more accurate, real-time credit underwriting, which lowers default risk and supports expanding credit offerings.
MaxAB is not alone in this shift. For instance, Nigeria's Sabi has pivoted towards commodity exports through its TRACE platform, driven by stronger margins and increasing global appetite for traceable products. Sabi has also made significant changes, cutting 20% of its workforce as part of this pivot.
In Morocco, MaxAB's subsidiaries, ABmaxCo and MaxPay, are gearing up for the launch of their marketplace, with a strategic focus on advancing fintech services. OmniPay, OmniRetail's finance solution, processes $95 million monthly while keeping non-performing loans under 0.5%. OmniRetail has also achieved breakeven EBIT and 5% net contribution margins by integrating credit via OmniPay, its proprietary finance solution.
The MaxAB-Wasoko merger, which took place in 2024, has prioritized internal alignment, merging technology infrastructures, streamlining administrative functions, and enhancing unit-level profitability. Industry analysts project that Fatura could generate approximately 25% of MaxAB-Wasoko's revenue in Egypt by fiscal year-end.
Despite these changes, the takeaway from the integration of financial services with distribution platforms in Africa's B2B e-commerce is that enduring the squeeze may depend more on funding inventory than on merely transporting it. The future of B2B e-commerce in Africa seems to be increasingly intertwined with fintech.
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- MaxAB-Wasoko's strategic shift towards fintech has not only strengthened its financial base through the acquisition of Fatura, but also introduced an asset-light fintech layer that leverages its logistics infrastructure for scaling financial services, as demonstrated by their success in Egypt with over $180 million in annual revenue.
- The transition towards fintech in Africa's B2B e-commerce sector is a response to the challenging economics of e-commerce, as it offers more predictable revenue streams and stronger unit economics with higher margins, aiding in the sustainable growth and profitability of these businesses.
