CAIRO: Cartona, an Egypt-based B2B commerce platform, recently raised $12 million in a Series A funding round. The proceeds will be used to accelerate the company’s expansion across the Egypt, expand its product line and technology and explore new vertical markets.
Jordanian venture capital firm Silicon Badia led the round along with SANAD Fund for MSME, Arab Bank Accelerator, Sunny Side Ventures and existing investors alongside Global Ventures and Kepple Ventures.
Mahmout Talaat, CEO of Cartona, told Arab News exclusively that the company will introduce buy-it-now and pay-later options for its retailers and vendors.
“The fintech solution is not intended to improve our finances, but it is essential for the survival of small shops. So it is completely different from a B2C option buy now, pay later,” he said. declared.
Talaat added that BNPL solutions would contribute 40-45% of transactions made on the platform.
“We expect to reach around 40 to 45% thanks to BNPL. We believe that ultimately it’s up to the person whether they want to buy it in cash, which is the cheapest option, or via supplier credit,” Talaat said.
Using an asset-light business model, Cartona owns no warehouses, products or vehicles and only takes a percentage of every order placed on the platform between retailers and wholesalers.
Talaat also said that much of their operations focus on integrations with enterprise resource planning software, making it a competitive advantage.
“We are working hard to expand our integrations since we are a partner of our vendors. We are not in competition with them. We are a digital channel for their sales. And that’s part of our value proposition where we integrate them directly into our company’s ERP,” added Talaat.
Cartona currently has around 1,500 suppliers using its platform to connect with over 60,000 retailers in 11 cities.
Talaat added that the company is not yet profitable as it was founded in 2020, but expects to be cash flow positive by 2024.
We are working hard on expanding our integrations as we are a partner to our vendors. We are not in competition with them. We are a digital channel for their sales.
“We grow five times a year. We have aggressive plans, but we are focused on getting a good market share in the cities we operate in and not growing extremely fast to get a good unit economy, because our platform is based on geolocation,” Talaat said.
Currently, the company is focused on the fast-moving consumer goods industry, but with its technology, it will be able to diversify into different sectors.
“We plan to explore other verticals that have the same dynamic as many vendors and many small brick-and-mortar retail stores such as lightweight building materials or electronics. We are looking at all of our options and expecting hopefully in 2023 to also start doing the same thing we have done in FMCG in another vertical,” he added.
Talaat said the FMCG market in Egypt is worth around $60-70 billion and growing at 8% per year.
“The market itself is huge; more than 96% are still offline; online adoption is still low, so I think everyone has room to grow,” he added.
With the rising costs of FMCGs in Egypt, Cartona has supported retailers by offering more than 12,000 products with different price ranges.