Swedish investment firm VNV Global has marked down its stake in African B2B e-commerce startup Wasoko by 48% following the announcement of its merger with MaxAB. Wasoko’s fair value is now estimated at $260 million.
Wasoko’s Stake Value Decreased by 48%
Swedish investment firm VNV Global has marked down its stake in African B2B e-commerce startup Wasoko by 48% following the announcement of its merger with MaxAB. This reduction in stake value comes after Wasoko’s fair value was estimated at $260 million as of December 2023.
( Credit to: Techcrunch )
VNV Global, which holds a 4.2% stake in Wasoko, now values its investment at $10.9 million. This markdown in value is not the first for VNV Global, as it previously marked down its investment in Wasoko in Q4 2022.
Despite the reduction in stake value, VNV Global plans to retain its investment in Wasoko post-merger with MaxAB, demonstrating its confidence in the long-term growth potential of the combined company.
Wasoko’s Journey as an African B2B E-commerce Startup
Founded in 2014 by Daniel Yu, Wasoko has emerged as one of Africa’s largest B2B grocery marketplaces. Based in Nairobi, the startup has successfully secured agreements with major suppliers such as P&G and Unilever, enabling it to offer competitive prices to its customer base of over 200,000 small retailers.
By 2022, Wasoko had expanded its operations to six additional African markets and reported an impressive $300 million in gross merchandise value (GMV) on an annualized basis.
While B2B e-commerce remains a relatively small portion of retail in Africa, accounting for less than 1%, the demand for physical retailers to source goods has made e-commerce a popular channel. This has resulted in increased funding and interest in B2B startups like Wasoko.
However, the sector has faced challenges in terms of unit economics and high costs, making profitability elusive for many players. Despite implementing cost-saving measures and focusing on its three largest GMV markets, Wasoko has faced layoffs, cost cuts, and closures.
The merger with MaxAB is seen as a lifeline for both companies as they aim to lead Africa’s B2B e-commerce industry profitably. The structure of the combined entity is yet to be determined, but both MaxAB and Wasoko are optimistic about their future prospects.
Wasoko’s Valuation and the Merger with MaxAB
VNV Global determines the fair value of its investment in Wasoko using a valuation model based on trading multiples of public peers, rather than historical funding rounds. The recent markdown in value reflects this approach.
Wasoko’s planned merger with MaxAB has raised questions about its valuation and the impact it may have. However, VNV Global remains committed to its investment and believes in the long-term growth potential of the combined company.
The merger is expected to create a strong player in the African B2B e-commerce market, providing a boost for both Wasoko and MaxAB as they strive for profitability and market leadership.
Conclusion
Despite a 48% reduction in stake value, VNV Global remains confident in its investment in African B2B e-commerce startup Wasoko. The planned merger with MaxAB is seen as a strategic move to drive profitability and establish a strong presence in the African market.
As Wasoko continues its journey as a major player in the B2B e-commerce space, the merger with MaxAB presents an opportunity for growth and expansion. The combined entity will have the potential to shape the future of B2B e-commerce in Africa, catering to the needs of small retailers and suppliers across the continent.