Egyptian startup Capiter raises $33M to expand B2B e-commerce platform across MENA

Funding startups that help manufacturers and sellers distribute products and merchants access them on a single platform keeps soaring across Africa.

Today, Cairo-based B2B e-commerce startup Capiter continues that trend by raising a $33 million Series A round.

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.

Capiter was launched in July 2020 by Mahmoud Nouh and Ahmed Nouh. Speaking with TechCrunch, CEO Mahmoud Nouh says Capiter solves problems around reach and insights for suppliers and manufacturers.

Many of the manufacturers in Egypt today do not have the right infrastructure of the supply chain in place to reach merchants. Nouh says that manufacturers can only reach 30% of merchants in the market, but with Capiter, that number goes up between 80% to 100%.

Also, a large portion of the manufacturers’ end trade happens via traditional channels where there is basically no transparency over data or market insights.

Using machine learning, Capiter says it helps these manufacturers gain critical insights into the markets they serve, the products they sell, and how they fair with competition.

Then for merchants, Capiter attends to three problems. The first is the inconvenience merchants have to deal with engaging several suppliers to find the right product. The second is transparency which involves some back and forth between merchants and manufacturers on pricing. The third is that merchants often have little or no access to working capital to get the right product and the right time.

With Capiter, merchants can order products from FMCGs and wholesalers while the company delivers them. Capiter also provides fair pricing and matching techniques that showcases a wide range of inventory for merchants.

Then it affords working capital to them to buy more products even when they are strapped with cash. Capiter partners with local banks in Egypt and the Central Bank to perform this.

Capiter has over 12 merchant types on its platform, including mom-and-pop stores, hotels, restaurants, cafes, electronic shops, supermarkets, grocery shops, and catering companies, each with its own customized solutions.

“We’re able to get the data from the products they buy. So we offer them the best solution on what they should sell, at what time and peak seasons, including when are the offerings happening. All of these are customized solutions that we offer,” said Mahmoud Nouh.

Capiter

The Capiter app

The company’s revenues are derived from little margins on the products bought from manufacturers and sold to merchants. Then on rebates for the suppliers and commission from the working capital provided to merchants. Capiter also makes money from providing market insights and data services to manufacturers and FMCGs.

Typically B2B e-commerce platforms operate either asset-light, inventory-heavy models. Nouh tells me that Capiter chose to use a hybrid model — making deliveries without owning any trucks to ensure scalability and owning inventory, especially for high turnover products helping the company with high availability and better pricing.

“This way has enabled us to scale the business in a very fast manner and at the same time, efficiently and reliably. Regarding warehouses and trucks, we don’t 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 adds that the company is targeting an annualized revenue of $1 billion by next year.

“We’re on a very good trajectory for achieving this,” he added. “In terms of team members, we have a team of more than 1000 people at the moment, including in warehouses, delivery, etc. So we’ve seen good traction across all board,” he answered when asked about Capiter’s traction.

Quona Capital, the co-lead investor in this round, is known to have made some B2B e-commerce bets over the past years, for instance, Kenya’s Sokowatch. The investment in Capiter adds to the firm’s portfolio in that 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 embedded finance model, combined with its expertise and strong user engagement, can have a dramatic impact on the financial lives of SMEs, helping them optimize their income which helps communities to thrive.”

“SME supply chain inefficiencies are massive throughout the Middle East. We believe the key blocker is the lack of working capital in the system. Capiter has built an asset-light way to aggregate retailers and suppliers and facilitate credit into 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 the local banks and financial institutions.” adds Ben Harburg, partner at MSA Capital, a global VC that has invested in fintechs like Nubank and Klarna.

According to Ahmed Nouh, the company’s COO, Capiter will expand into new verticals like agriculture and pharmaceutical offerings.

The co-founder brings experience from the shipping and logistics space. Both he and Mahmoud are serial entrepreneurs. The latter’s journey is quite prominent, having worked in the mobility space as the co-founder and COO of Egyptian ride-hailing company SWVL. The company recently announced a potential SPAC deal valuing it at $1.5 billion and is one of the few African startups breeding a tech mafia. Ahmed Sabbah, another co-founder of the company, now runs early-stage fintech startup Telda.

Capiter has attracted a global team that brings together the expertise from companies like Careem and Flipkart needed to achieve the company’s targets, said Mahmoud.

He adds that the team, alongside the provision of financial services via partnerships with banks and its hybrid model, is how the company stands out in a competitive market, including the likes of Fatura, Bosta, and MaxAB.

Following this investment, the company plans to expand vertically (in terms of the buyer type) and geographically within the next year.

“We want to serve every single SME in the MENA region and expanding inside Egypt and globally.” He adds that Savola Group, one of its investors and the largest investor for FMCG products in the MENA region, will prove pivotal to this growth. Capiter also plans to diversify its financial services offerings to include payments. 

#africa, #b2b-e-commerce-retail, #ecommerce, #egypt, #finance, #funding, #merchant, #middle-east, #recent-funding, #startups, #tc

Printify bags $45M, led by Index, to ride the custom printing boom

The creator economy loves merch which is great news for on-demand custom printing startups such as Latvia-based Printify — today it’s announcing a $45 million Series A round, led by Index Ventures, off the back of rising demand for its services.

The mission: To keep growing its global marketplace of print shops to meet rising demand for custom wares, shipped.

Also participating in the funding round: H&M Group, Virgin Group, plus the founders of Transferwise, Vinted, Squarespace, RedHat, and entertainment industry investors including Will Smith’s Dreamers VC and NBA player Kristaps Porzingis.

TechCrunch understands Printify’s post-money valuation is just over $300M.

Ecommerce and creator-focused platforms like Patreon and Shopify — which cater to micro-brand creating individual sellers (be they designers, content creators, ecommerce entrepreneurs or other highly online hustlers) — are helping to fire up demand for custom products like t-shirts, mugs, stickers etc, expanding the market for on-demand printing and shipping.

Printify says it’s now connecting some two million merchants with print providers all over the world — and shipping a million units per month.

It’s also grown to employ close to 500 people — doubling its headcount over the past year, now with a plan to add a further 200 positions by the end of the year.

“Our main audiences are creators, entrepreneurs; most of our merchants are people who want to build a side-business and earn money in addition to their main income, however, we also see a high growth of creators and entrepreneurs who use Printify as a service that helps building their core business,” the startup tells TechCrunch.

It’s one of a number of custom printing startups that have positioned themselves to step in to tackle the printing and shipping piece at scale, often building up businesses over several years from a far smaller base. (Others in the space include Printful, Gelato and Zazzle.)

The 2015-founder Printify has slightly fewer years in the business than some of its rivals but it argues that’s allowed it to be more focused on serving the micro-brand building merchants who are now sparking such a boom in demand custom wares.

“Printify gives the ability for everyone to earn additional income,” it says when asked about the competitive mix — touting a focus on product selection, quality and price as its special sauce, in addition to its marketplace’s global footprint, meaning it can print and ship products to meet demand from merchants all over the world.

“Those are the key aspects our merchants are looking for,” it adds. “Printify provides the largest selection of on-demand printed products for creators and merchants to sell online. Furthermore, Printify provides lowest prices, while ensuring reliable high quality standards.”

The most popular products being sold by merchants using its marketplace are “the classics” — aka T-shirts, hoodies, stickers, mugs, posters and hats.

“We also see a fast-growing market for baby and children’s products, sportswear, pet products and drinkware,” it adds. “Most merchants choose Printify because of our wide selection and geographical flexibility — we have 370+ products in our catalog and adding several each week, printed in 100+ locations all over the world.”

Commenting on the Series A funding in a statement, Dino Becirovic, principal at Index Ventures, said: “Printify is the leading marketplace for on-demand manufacturing, offering the largest selection of products and print providers. They have removed all the barriers to product creation and enabled over 2 million creators to launch successful merchandise businesses at the push of a button. Over time, as more manufacturers come online and more methods become available, Printify will allow any creator to bring their wildest product ideas to reality.”

 

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Wayflyer raises $76M to provide ‘revenue-based’ financing to e-commerce merchants

Wayflyer, a revenue-based financing platform for e-commerce merchants, has raised $76 million in a Series A funding round led by Left Lane Capital.

“Partners” of DST Global, QED Investors, Speedinvest and Zinal Growth — the family office of Guillaume Pousaz (founder of Checkout.com) — also put money in the round. The raise comes just after Wayflyer raised $100 million in debt funding to support its cash advance product, and 14 months after the Dublin, Ireland-based startup launched its first product.

With an e-commerce boom fueled by the COVID-19 pandemic, Wayflyer is the latest in a group of startups focused on the space that has attracted investor interest as of late. The company aims to help e-commerce merchants “unlock growth” by giving them access to working capital (from $10,000 up to $20 million) so they can improve cash flow and drive sales. For example, more cash can help these merchants do things like buy more inventory in bulk so they can meet customer demand and save money. 

In a nutshell, Wayflyer uses analytics and sends merchants cash to make inventory purchases or investments in their business. Those merchants then repay Wayflyer using a percentage of their revenue until the money is paid back (plus a fee charged for the cash advance). So essentially, the merchants are using their revenue to get financing, hence the term revenue-based financing. The advantage, Wayflyer says, is that companies make repayments as a percentage of their sales. So if they have a slow month, they will pay back less. So, there’s more flexibility involved than with other mechanisms such as traditional bank loans.

Co-founder Aidan Corbett believes that in a crowded space, Wayflyer’s use of big data gives it an edge over competitors.

Corbett and former VC Jack Pierse spun Wayflyer out of a marketing analytics company that Corbett had also started, called Conjura, in September 2019.

“Jack came to me and said, ‘You should stop using our marketing analytics engine to do these big enterprise SaaS solutions, and instead use them to underwrite e-commerce businesses for short-term finance,’ ” Corbett recalls.

And so he did.

“We just had our heads down and started repurposing the platform for it to be an underwriting platform,” Corbett said. It launched in April 2020, doing about $600,000 in advances at the time. In March of 2021, Wayflyer did about $36 million in advances.

“So, it’s been a pretty aggressive kind of growth,” Corbett said.

Over the past six months alone, the company has seen its business grow 290% as it has deployed over $150 million of funding across 10 markets with a focus on the U.S., the United Kingdom and Australia. About 75% of its customers are U.S. based.

Wayflyer plans to use its new capital toward product development and global expansion with the goal of entering “multiple” new markets in the coming months. The company recently opened a sales office in Atlanta, and also has locations in the U.K., the Netherlands and Spain.

To Corbett, the company’s offering is more compelling than buy now, pay later solutions for consumers for example, in that it is funding the merchant directly and able to add services on top of that.

“There’s a lot more opportunity for companies like ourselves to differentiate because essentially, we focus on the merchants. And when we underwrite the merchant by getting data from the merchant, there’s a lot of additional services that you can put in on top,” Corbett explained. “Whereas with buy now, pay later, you get information on the consumer, and there’s not as much room to add additional services on top.”

For example, if a business requests an advance and either is not approved for one, or doesn’t choose to take it, Wayflyer’s analytics platform is free to anybody who signs up to help them optimize their marketing spend.

“This is a critical driver of value for e-commerce businesses. If you can’t acquire customers at a reasonable price, you’re not going to be around very long. And a lot of early-stage e-commerce businesses struggle with that,” Corbett said.

It also can pair up a merchant with a marketing analytics “specialist” to analyze its marketing performance or an inventory “specialist” to look at the current terms and price a business is getting from a supplier.

“Our focus from the very beginning is really supporting the merchants, not just providing them with working capital,” Corbett said.  

Another way the company claims to be different is in how it deploys funds. As mentioned above, merchants can pay the money back at varied terms, depending on how sales are going. The company makes money by charging a principal on advances, and then a “remittance rate” on revenues until the total amount is paid back.

“We tend to be more flexible than competition in this way,” Corbett said. “Also, some competitors will pay invoices on merchants’ behalf or give them a pre-charged card to use on advertising spend,” Corbett said. “We always give cash into a merchant’s account.” 

Wayflyer recently inked an agreement with Adobe Commerce, a partnership it said would provide a new channel to further amplify its growth with the goal of funding 8,000 e-commerce businesses in the first year of the partnership.

For his part, Left Lane Capital Partner Dan Ahrens said that his firm was impressed by Wayflyer’s “nuanced understanding of what will drive value for their clients.”

“The team’s focus, specialization, and deep analytical expertise within the e-commerce market also drives superior underwriting,” he told TechCrunch. “Their explosive growth has not come about by taking on undue risk. We are big believers that their underwriting will only improve with scale, and that Wayflyer will be able to compound its competitive advantages over time.”

As mentioned, this is an increasingly crowded space. Earlier this month, Settle announced it had raised $15 million in a Series A funding round led by Kleiner Perkins to give e-commerce and consumer packaged goods (CPG) companies access to non-dilutive capital.

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