Happy Friday! Mergers, IPOs, acquisitions, a $5 million bridge to support Palestinian tech startups, and, surprise, surprise—more Web3 funding. August has been quite the month. Let’s get into it!

P.S. If you missed this week’s deep dive on how regional startups like spiderSilk and others are defending MENA businesses against costly data breaches and cyber attacks, you can check it out here.

This week’s round-up is a 5 min read:

• 🤝 Egypt’s MaxAB and Kenya’s Wasoko complete merger of their B2B ecommerce platforms

• 👾 Web3 streaming platform myco secures $10 million Series A

• 🏍️ Delivery Hero eyes 2024 IPO for Talabat

• 🔈 Catch-up on Episode 9 of the VC React Podcast

🚀 Startup funding round-up

myco (🇦🇪 UAE), a web3 content streaming platform, has completed the first close of its Series A round, raising $10 million from multiple investors including Daman Investments, Aptos Labs, and 88 accredited investors via the crowdfunding platform Republic.com.

Verofax (🇦🇪 UAE), a Web3 services provider of AR, blockchain, and artificial intelligence services to enhance tourist, shopper, and brand marketing experiences, has raised $3 million in bridge round, led by KAUST, Plug & Play Tech Center, Navig8 Group, and Trove Capital UK, and others.

Kaso (🇸🇦 KSA), a YC-backed procurement management platform for restaurants and suppliers, has received an undisclosed investment from Prince Khaled bin Alwaleed backed KBW Ventures.

Powder Beauty (🇦🇪 UAE), a female-led e-commerce platform for eco-conscious beauty products, has closed a pre-Series A funding round at an undisclosed value, led by Sophia Collective and NKHEL, with participation from regional angel investors, including Maha Taibah.

InCurA (🇪🇬 Egypt), a healthtech startup focusing on biomedical health technology for bleeding control products, has secured an undisclosed investment from Falak Startups.

Tajweed (🇧🇭 Bahrain), an edtech platform for mastering Quranic Tajweed and Arabic with expert-led, video-based courses in eight languages, has secured an undisclosed investment from Tenmou.

Travilege (🇧🇭 Bahrain), a B2B2C ERP software platform designed for travel agencies, has secured an undisclosed investment from Tenmou.

Merger

🤝 Egypt’s MaxAB and Kenya’s Wasoko complete merger of their B2B ecommerce platforms

🤝 Two of Africa’s largest B2B e-commerce platforms, Kenya-based Wasoko and Egypt-based MaxAB, have completed their merger, eight months after the deal was first announced.

• The co-founders of MaxAB and Wasoko, Belal El-Megharbel and Daniel Yu, will now serve as co-CEOs of the combined entity, which will operate with 4,000 employees across Kenya, Tanzania, Rwanda, Egypt, and Morocco.

💰 Investor lowdown: Both startups last raised funding in late 2022. MaxAB secured $40 million in a pre-Series B led by US private equity firm Silver Lake, while Wasoko (formerly Sokowatch) raised $125 million at a $625 million valuation in a Series B round led by Tiger Global and Avenir Growth.

⚙️ Break it down

Wasoko and MaxAB operate as distributors for small mom-and-pop shops across Africa and have recently expanded to offer additional financial services, such as e-payments, credit financing, and digital service top-ups.

🐂 MaxAB + Wasoko bull case (a new name is still in the works)

1. Both companies have already achieved profitability in their e-commerce operations across most markets, earning a profit per delivery.

2. The merger will allow them to combine overhead costs, which should result in immediate cost savings and increased efficiency, enhancing overall profitability.

🔮 Flashforward

The new combined company will focus on diversifying by expanding its fintech offerings in existing markets over the next year, providing a contrast to the high-volume, low-margin nature of B2B e-commerce that needs significant investment to be profitable.

💰 VC round-up

🇵🇸 Intersect, a Ramallah-based tech hub, has announced the first close of a $5 million bridge financing facility called SAFE Palestine to support Palestinian tech startups affected by the ongoing war. This initiative will provide urgently needed liquidity to 29 high-growth startups, preserving over 300 jobs and creating new opportunities in the tech sector.

• Supported by Google, Amjad Masad (CEO of Replit), Paul Graham (founder of Y Combinator), Fadi Ghandour (founder of Aramex and Wamda), and Samih Toukan (co-founder of Maktoob and Souq.com), the fund uses "simple agreements for future equity" (SAFEs) to quickly deploy capital.

• This funding comes as part of the broader RISE Palestine initiative by Intersect and the Bank of Palestine to aid tech founders and digital workers. Notably, 40% of the startups receiving investment have at least one female founder.

🇸🇦 A group of investors and GCC-based family offices have launched Waad, a $200 million investment fund focused on growth-stage startups in the region. The fund is led by Saudi investor Yaser AlGhamdi, the new CEO, with the AlMajed and AlMisfer family offices also involved. Yaser is a prolific regional angel investor, having backed over 180 startups, including companies like Sary, Zest Equity, and Growdash, to name but a few. Waad’s portfolio includes 23 companies in sectors such as F&B, fintech, AI, and proptech. The fund also has notable advisors, including Nana’s co-founder and Amal Dokhan.

🖥️ Tech round-up

🏍️ Delivery Hero plans to list its MENA business, Talabat, on the Dubai Financial Market in Q4 2024. The IPO will involve a secondary share sale, with Delivery Hero retaining a majority stake. It's unclear if the IPO will include its Saudi and Turkish businesses, operated by HungerStation and Yemeksepeti, respectively. The listing depends on market conditions and regulatory approval. Delivery Hero’s shares rose 7% following the announcement. The MENA region is the company’s fastest-growing market, with GMV up 29.4% year-over-year to $6.56 billion and revenue increasing 32.2% to $1.81 billion in H1 2024.

💳 Saudi fintech Barq, founded by former STC Pay CEO Ahmed Alenazi, has gained over 1 million users within three weeks of its launch. The startup, which received an e-wallet license from the Saudi Central Bank in January, offers digital personal accounts with local and international transfers and Visa cards. Barq, which rebranded from Barraq, allows users to transfer money to over 200 countries with competitive exchange rates and features a marketplace and game center with cashback rewards. Since launching, Barq has issued 600,000 cards and processed over SAR 500 million ($133 million).

🤖 Dubai AI Campus and Google Cloud have announced a collaboration agreement aimed at fostering the growth of the start-up ecosystem within the Dubai AI Campus. Under the collaboration, Google Cloud intends to offer mentorship opportunities for selected start-ups within the Dubai AI Campus and work with the Campus on programmes such as Google Cloud's Gen AI Startup School.

💰 Global investments round-up

🇦🇪🛰️ Space Intelligence, a Scotland-HQ satellite data provider, has raised an undisclosed Series A funding round led by UAE-based AzurX Space Ventures. The startup was founded in 2017 and provides satellite imaging to track deforestation and mass restoration.

💸 Acquisitions round-up

🏠 Sakan (🇰🇼 Kuwait), founded by Abdullah Al-Saleh, has acquired Hapondo (🇶🇦 Qatar), a real estate marketing platform founded by Ahmad AlKhanji, for an undisclosed amount.

Established in 2019, Hapondo offers digital property listings and comprehensive market analytics. The acquisition will enable Sakan to expand its reach into the Qatari market by leveraging Hapondo’s local expertise and client relationships.

💰 VC React Podcast: Episode 9

🎧 In this week's episode of the VC React Podcast, we dived into the surge of Web3 and DeFi innovations in MENA. We discussed Gate.io’s Falcon Gate Ventures, a new $100 million global crypto fund from Abu Dhabi, and the rise of alternative financing options for startups, such as revenue-based financing and invoice factoring, including PostEx’s expansion into Saudi Arabia with these offerings.

We also explored the growing interest in loyalty programs and cash backs, highlighting Resal's recent $9 million Series A round to enhance its platform in Saudi Arabia.

This week, Ahmad and I had the pleasure of speaking with:

• Arnav Danthi (Principal at Nuwa Capital)

• Fatima Abdullah (Associate at Plug and Play Tech Center)

📆 Events and opportunities

Applications are now open for the Spring Studios Founder Launchpad! 🚀 This fully virtual 8-week venture-building program is perfect for founders looking to build a VC-ready startup proposition.

The program offers:

• 🧑‍🤝‍🧑 Access to a community of top global founders

• 🎓 Mentorship from industry experts, including exited founders and CXOs

• 💡 Expertise from experienced venture builders

• 🌍 A platform for testing ideas in the Bahrain and MENA markets

📆 Applications are open until September 5th👇

📰🎧 Recommended Reads / Listens

• Mohamed Refai. Interview with Swvl’s CEO and Co-founder Mostafa Kandil

• Mennan Gamal Nour El Din. Egyptian Entrepreneurship Sector Diagnostics report H1 2024

•  Dubai Future District Fund. Halfway through 2024: A Deep Dive into Venture Capital in the UAE