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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