Funding for startups that help manufacturers and vendors distribute products and traders access them on a single platform continues to increase across Africa.
Today, Cairo-based B2B e-commerce startup Capiter continues this trend by raising a Series A funding round of $ 33 million.
The investment was co-led by Quona Capital and MSA Capital. Other participating investors include Savola, Shorooq Partners, Foundation Ventures, Accion Venture Lab and Derayah Ventures.
Captain Was launched in July 2020 by Mahmoud Nouh and Ahmed Nouh. Speaking to TechCrunch, CEO Mahmoud Nouh Says Capiter Solves Scope and Information Issues for Suppliers and Manufacturers.
Today, many Egyptian manufacturers do not have the right supply chain infrastructure to reach traders. Nouh says that manufacturers can only reach 30% of traders in the market, but with Capiter, that number increases between 80% and 100%.
In addition, a large part of the final trade of manufacturers passes through traditional channels where there is essentially no transparency on data or market information.
Through machine learning, Capiter says it helps these manufacturers gain critical insight into the markets they serve, the products they sell, and how fair they are with the competition..
Next, for traders, Capiter takes care of three issues. The first is the downside for traders of having to rely on multiple suppliers to find the right product. The second is transparency which involves back and forth between traders and manufacturers on prices.. The third is that traders often have little or no access to working capital to get the right product at the right time.
With Capiter, traders can order products from FMCGs and wholesalers while the company delivers them. Capiter also offers fair pricing and matching techniques that present a wide range of inventory for traders..
Then it gives them working capital to buy more products even when they attached with cash. Capiter is partnering with local banks in Egypt and the Central Bank to achieve this.
Capiter has over 12 types of merchants on its platform, including mom-and-pop stores, hotels, restaurants, cafes, electronics stores, supermarkets, grocery stores, and catering businesses, each with its own personalized solutions..
“We are able to get the data from the products they buy. We therefore offer them the best solution on what to sell, at what time and in high season, including when the offers take place. All those are personalized solutions we offer, ”said Mahmoud Nouh.
Company income are derived low margins on products bought from manufacturers and sold to traders. Then on rebates for suppliers and commissions on working capital provided to merchants. Capiter also makes money by providing market information and data services to manufacturers and FMCGs.
Typically B2B ecommerce platforms exploit either low inventory or low inventory models. Nouh tells me that Capiter chose to use a hybrid model – make deliveries without owning trucks to ensure scalability and own inventory, especially for high turnover products, help the business with high availability and better prices.
“This method has allowed us to develop the company very quickly and at the same time, effectively and reliably. Regarding warehouses and trucks, we don’t own them; we praise them. We take care of the third-party logistics for the transport and we manage it.
Over 50,000 merchants and 1,000 sellers use Capiter. According to CEO Nouh, the company has provided up to 6,000 referrals. He also adds that the company is targeting annualized revenue of $ 1 billion by next year.
“We are on a very good trajectory to achieve this,” he added. “In terms of team members, we have a team of more than 1000 people at present, including in warehouses, delivery, etc. So we saw good traction in all areas, ”he replied when asked about Capiter’s traction.
Quona Capital, the lead co-investor of this round, is known having made bets on B2B e-commerce in recent years eg Sokowatch in Kenya. The investment in Capiter adds to the company’s portfolio in this regard and a growing presence in the MENA region being its first check made in Egypt.
In a statement, Quona Co-Founder and Managing Partner Monica Brand Engel said, “Capiter’s integrated funding model, combined with its expertise and strong user engagement, can have a huge impact on the financial lives of companies. SMEs, helping them optimize their income, which helps communities thrive. “
“Supply chain inefficiencies for SMEs are massive across the Middle East. We believe the main obstacle is the lack of working capital in the system. Capiter has built a light means to aggregate retailers and suppliers and facilitate credit in the system through a comprehensive multi-product offering such as trade, credit finance, digital payments, accounting and inventory management for SMEs, leveraging the ecosystem built by banks and local financial institutions. added Ben Harburg, partner at MSA Capital, a global venture capitalist that has invested in fintechs like Nubank and Klarna.
According to Ahmed Nouh, the chief operating officer of the company, Capiter will expand into new verticals such as agriculture and pharmaceuticals.
The co-founder brings his experience in the field of shipping and logistics. He and Mahmoud are serial entrepreneurs. The latter’s journey is quite striking, having worked in the mobility space as a the co-founder and COO of Egyptian carpooling company SWVL. The company recently announced a potential deal with SPAC worth $ 1.5 billion and is one of the few African startups to create a tech mafia.. Ahmed Sabbah, another co-founder of the company, now heads up start-up fintech startup Telda.
Capiter has attracted a global team that brings together the expertise from companies like Careem and Flipkart needed to achieve business goals, said Mahmoud.
He adds that the team, alongside providing financial services through partnerships with banks and its hybrid model, is how the company sets itself apart in a competitive market, including Fatura, Bosta and MaxAB..
Following this investment, the company plans to expand vertically (in terms of the type of buyer) and geographically during the following year.
“We want to serve every SME in the MENA region and grow in Egypt and around the world. He adds that Savola Group, one of its investors and the largest investor for FMCG products in the MENA region, will be critical to this growth. Capiter also plans to diversify its financial service offerings to include payments.