Egyptian Startup Cartona Raises $8.1M Amidst B2B E-Commerce Slowdown in Africa
Techcrunch•3 months ago•
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Egyptian Startup Cartona Raises $8.1M Amidst B2B E-Commerce Slowdown in Africa

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b2becommerce
africatech
startups
egypt

Summary:

  • Cartona, an Egyptian B2B e-commerce platform, raises $8.1 million in a Series A extension, defying the recent downturn in African B2B e-commerce.

  • Cartona's asset-light model has proven successful, focusing on technology, unit economics, and partnerships.

  • The company plans to deepen its operations in Egypt and expand into Saudi Arabia, exploring new product lines and growing its embedded finance offerings.

  • Despite significant funding and competing players, B2B e-commerce penetration in Africa remains in its early stages, presenting a massive opportunity for Cartona and other players.

  • Cartona's success demonstrates the potential of asset-light models in B2B e-commerce, highlighting the importance of technology, unit economics, and strategic partnerships.

Cartona Secures $8.1M Despite B2B E-commerce Downturn in Africa

While investors are pulling back from B2B e-commerce in Africa, Cartona, an Egyptian platform digitizing the traditional trade market, has secured an $8.1 million Series A extension. This comes after significant growth and near-full EBITDA profitability, according to founder Mahmoud Talaat.

Cartona's Success Story

Cartona's asset-light model, connecting FMCG suppliers with retailers, has proven successful, dispelling criticisms that such models lack customer retention and struggle against asset-heavy competitors.

Key Strategies:

  • Tech Focus: Cartona spent its early years refining its technology, user experience, and fulfillment rates to match the service levels of asset-heavy models.
  • Unit Economics: The platform has focused on improving its unit economics, achieving near-full profitability despite the devaluation of the Egyptian pound.
  • Partnership over Competition: Cartona partners with local suppliers, leveraging their existing strengths in operations, pricing, and local delivery.

Expansion and Future Plans:

  • Market Expansion: Cartona plans to deepen its operations in Egypt's FMCG and HORECA (hotel, restaurant, and cafe/catering) sectors, with potential expansion into Saudi Arabia.
  • Vertical Expansion: Cartona is exploring new product lines within Egypt, leveraging its existing supply base.
  • Embedded Finance: The platform is growing its embedded finance offerings, providing credit to retailers through local currency facilities.

The Bigger Picture:

  • Egypt's Retail Market: The Egyptian retail market is vast, with over 400,000 shops and a growing annual rate of 8%. Cartona targets a market size of $120 billion, with the food and beverage sector alone valued at $70 billion.
  • Early Stages of Digitization: Despite significant funding and competing players, B2B e-commerce penetration in Africa remains in its early stages.
  • Potential for Growth: Cartona believes that B2B e-commerce is poised for rapid growth, driven by its value proposition for retailers and suppliers.

Key Takeaways:

  • Cartona's success demonstrates the potential of asset-light models in B2B e-commerce.
  • The platform's focus on technology, unit economics, and partnerships has been crucial to its growth.
  • The African B2B e-commerce market is ripe for disruption, with Cartona positioned to play a significant role.

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