Last September, an Egyptian startup Capiter Raised $33 Million in Series A Funding To compete in the country’s growing B2B e-commerce and retail space. Fast forward a year, the startup has laid off several employees and now the CEO and COO are relieved of their duties after mismanaging the money.
Here’s what we know so far. Between June and July, several ex-employees of Egyptian startups, including capetireThey wrote posts about layoffs at their companies even though the employers did not address them publicly. Other companies include Ubay Egypt, Almenos, ExpandCart, and Primore.
Some sources told TechCrunch that Capiter laid off at least 100 employees in those two months. Others describe a workplace with poor management and no structure, and the company is finding it difficult to include merchants on its platform while simultaneously running out of funds. They said the company only had a runway for one month until August. TechCrunch contacted Capiter at the time but received no response.
As a result, Capiter investors have been looking for potential buyers to absorb the troubled company in the form of an acquisition or merger. This information is further confirmed in A local news report As the Capiter’s Council allegedly said so The founders were not reporting to the Board of Directors, its representatives and shareholders during the on-site personal due diligence procedures for a potential merger. else Publishing He stated that the executives refrained from appearing before the board of directors after internal turmoil and disagreements over their management.
Prior to Kapiter, Mahmoud was the co-founder and COO of the Egypt-based, Dubai-based SWVL (the company that relocated to the public via the SPAC صفقة deal last year, laying off 32% of its employees This is possible). He launched with his brother Ahmed Capiter in 2020 as a FMCG platform that allows small and medium-sized retailers to order inventory, arrange delivery, and access financing to pay for merchandise. Its competitors include MaxAB and Cartona in Egypt, and in Africa, Wasoko, TradeDepot and Chari.
Capiter had 50,000 merchants and 1,000 sellers with more than 6,000 SKUs on its platform when the founders spoke to TechCrunch last September. In the interview, they said Capiter was on track to generate $1 billion in annual revenue this year. And like many startups in Africa and globally, Capiter has aggressively put the last year to work to achieve its goals.
However, 2022 has taken an unexpected turn for many tech startups as they grapple with the uncertainty arising from rising interest rates and other factors that are having a gradual impact on venture capital. News of layoffs, flat rounds and cuts from startups in various sectors – especially those that have raised a lot of money in the last 18-24 months, such as plankAnd the 54 JinAnd the kodaAnd the market forces It was more widespread even though the continent boasted better total risk capital by the end of Q2 2022 than Q2 2021.
B2B ecommerce platforms run on either light or stock heavy models. The latter requires more capital and for Capiter, which is using a hybrid model, it is unclear how the company has run out of money and is already looking to sell after raising millions from Quona Capital, MSA Capital, Shorooq Partners, Savola and others last year. Capiter investors declined to comment on the matter but released an email statement.
“The Board of Directors and shareholders have initiated an internal investigation and are therefore not entitled to comment on news or allegations circulating on social media at this time. The Board of Directors and shareholders are also working closely with relevant stakeholders, legal teams and human resources as well as legal authorities to conduct an external investigation into this matter.”
Meanwhile, according to local reports, the company’s chief financial officer, Majed Al-Ghazouli, will take over as interim CEO. Mahmoud did not respond to the comment.
Update: CEO Mahmoud Noah, in response to the allegations, said, “I deny the false allegations and that I have not received any official notification of the above. [referencing the statement about his and Ahmed’s dismissal]. “
This is an advanced story…