Across Africa, the financing of startups that aids the distribution of products by bringing together manufacturers and merchants on one platform keeps increasing. Today, Egyptian B2B e-commerce startup Capiter continues that trend by raising a $33 million Series A round. The funding round was co-led by Quona Capital and MSA Capital and included other participating investors such as Savola, Shorooq Partners, Foundation Ventures, Accion Venture Lab, and Derayah Ventures.
Capiter is a B2B marketplace that brings together fast-moving consumer goods(FMCGs), wholesalers, and merchants on one platform, enabling merchants to order their products through an eCommerce checkout and receive credit on their purchases. The Cairo-based startup was founded by Mahmoud Nouh and Ahmed Nouh and launched in July 2020 to solve manufacturers’ and merchants’ problems around factors such as reach and insights.
The company is playing a vital role as many of the manufacturers in Egypt lack the right infrastructure of the supply chain in place to reach merchants, currently. A series of problems are faced by both manufacturers and merchants.
According to the founders, Capiter increases manufacturers’ reach from 30 percent to between 80 percent to 100 percent. Another problem manufacturers in Egypt face is the absence of transparency over data or market insights due to manufacturers’ use of traditional channels for their end trade. Using machine learning, Capiter solves this problem by providing manufacturers with critical insights into the markets, which they need to perform better.
Merchants, on the other hand, face problems three problems. The first is the stress of engaging several suppliers just 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 at the right time.
Capiter solves the first problem by enabling merchants to order products from FMCGs and wholesalers while the company delivers them. It solves the second problem by providing fair pricing and matching techniques that showcase a wide range of inventory for merchants. Then it grants working capital to merchants to buy more products even when they are strapped with cash. To execute on this front, Capiter partners with local banks in Egypt and the Central Bank. The company also 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 customized solutions.
Currently, over 50,000 merchants and 1,000 sellers use Capiter. According to Chief Executive Officer Mahmoud Nouh, Capiter has provided up to 6,000 Stock Keeping Units (SKUs). He added that the company is targeting an annualized revenue of $1 billion by next year.
With the newly raised funds, Capiter plans to expand its B2B e-commerce platform across the Middle East and North Africa (MENA). Ahmed Nouh, Capiter’s Chief Operating Officer said that the company plans on expanding into new vertical markets like agriculture and pharmaceutical offerings.