Cartona, a B2B e-commerce platform, has raised $8.1 million in a Series A extension from new and existing investors for growth and regional expansion. The funding was a mix of equity ($5.6 million) and debt ($2.5 million).
The startup, which operates in 17 Egyptian cities, connects FMCG manufacturers with retailers, with plans to expand to other markets in Middle-East and north Africa. Cartona enables buyers to order inventory by providing an easy-to-use mobile application that allows them to access a network of curated sellers.
Cartona has introduced embedded financing which is seamlessly integrated into ordering cycles. The platform additionally offers detailed market insights on buyer behaviour, price competition and market share.
“We are delighted to complete a Series A extension – which we have done from a position of strength. Our operational and financial metrics are all progressing very positively which has helped us to attract capital from existing and new investors,” said Mahmoud Talaat, Cartona CEO and co-founder.
The funding round was led by Egyptian VC Algebra Ventures, with participation from Silicon Badia and SANAD Fund who brought in equity while GlobalCorp and Camel Ventures provided debt.
Cartona’s $8.1 million raise breaks a difficult year for B2B e-commerce companies as they have struggled to raise fresh funding as macroeconomic conditions on the continent have worsened.
“Our product rollout, verticals and offerings will continue to grow as will our penetration of the Egyptian market. We have an exciting future ahead, replicating the successful execution of our business model in other regional markets – all making trading as easy and accessible as possible for retailers and suppliers,” said Talaat.
Asset-light model
Cartona’s asset-light business model, with a lean cost base and compelling unit economics, remains a major competitive differentiator – especially amid an inflationary environment – with the Company reaching experience levels on par with asset-heavy operating models.
“Cartona has built an exceptionally capital efficient model that has allowed it to deliver on strong growth and profitability, even during economic headwinds. The asset light nature of its model creates scalable infrastructure that can quickly be adapted for entry into new markets and adjacencies. Cartona has also been a driving force for financial inclusion in the retail sector as more and more of its small merchants take advantage of inventory financing options,” said Omar Khashaba, general partner at Algebra Ventures.
Cartona empowers the traditional retail market to be more efficient by streamlining the distribution process – directly connecting retailers with wholesalers, suppliers and FMCGs.
Retailers can better manage stock and working capital via cash or credit orders – improving profit margins. Cartona’s proprietary technology can be fully integrated with retailers and suppliers for ordering, inventory management, branding, embedded finance, ledger and tax.
The company claims to have over 180,000 retailers on its platform with its fast growing new vertical HORECA registering 3,000 customers already.
African B2B e-commerce startups have had a tough year with some including Kenya’s iProcure, Copia and RejaReja closing. The tough macroeconomic environment has made their business models unsustainable for a continent with low purchasing power.
