TechFounders of well-funded Egyptian B2B startup Capiter fired following...

Founders of well-funded Egyptian B2B startup Capiter fired following fraud allegations • TechCrunch

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Final September, Egyptian startup Capiter raised $33 million in Sequence A funding to compete within the nation’s rising B2B e-commerce and retail area. Quick-forward a 12 months later, the startup has laid off a number of workers and now its CEO and COO have been relieved from their duties after allegedly mismanaging funds.

Right here’s what we all know thus far. Between June to July, a number of ex-employees of Egyptian startups, together with Capiter, wrote posts about layoffs at their respective firms despite the fact that the employers by no means addressed them publicly. Different firms embody OPay Egypt, elmenus, ExpandCart and Brimore.

Some sources informed TechCrunch that Capiter had laid off at the very least 100 employees in these two months. Others described a office with poor administration and no construction and an organization discovering it laborious to onboard retailers to its platform whereas working out of cash concurrently. The corporate had solely a month runway as of August, they stated. TechCrunch reached out to Capiter on the time however acquired no response. 

Consequently, Capiter buyers have been looking for potential patrons to soak up the struggling firm within the type of an acquisition or merger. This info was additional corroborated in an area information report the place Capiter’s Board allegedly stated that the founders had not been reporting to the board, its representatives and shareholders throughout on-site in-person due diligence for a possible merger. One other publication said the executives had avoided showing earlier than the board of administrators after inner disturbances and disagreements over their administration methodology.

Earlier than Capiter, Mahmoud was the co-founder and COO of Egypt-born and Dubai-based ride-hailing firm SWVL (the corporate, which went public through a SPAC deal final 12 months, laid off 32% of its employees this Might). Together with his brother Ahmed, he launched Capiter in 2020 as an FMCG platform that enables small and medium-sized retailers to order stock, organize supply and entry financing to pay for items. A few of its rivals embody MaxAB and Cartona in Egypt, and in Africa, Wasoko, TradeDepot and Chari. 

Capiter had 50,000 retailers and 1,000 sellers with greater than 6,000 SKUs on its platform when the founders spoke to TechCrunch final September. Within the interview, they stated Capiter was on its technique to reaching an annualized income of $1 billion this 12 months. And like many startups in Africa and globally, Capiter employed aggressively final 12 months to fulfill its targets. 

Nevertheless, 2022 has taken an sudden flip for a lot of tech startups as they take care of uncertainty arising from growing rates of interest and different elements which have a trickle-down impact on enterprise capital. Information of layoffs, flat rounds and cutbacks from startups in numerous sectors — particularly those who raised some huge cash throughout the previous 18-24 months, comparable to Wave, 54gene, Kuda, and Marketforce — have been extra widespread regardless of the continent boasting a greater VC whole by the top of Q2 2022 in comparison with Q2 2021. 

B2B e-commerce platforms function both asset-light or inventory-heavy fashions. The latter requires extra capital and for Capiter, which employs a hybrid mannequin, it’s unclear how the corporate has exhausted its funds and is already seeking to promote after elevating thousands and thousands from Quona Capital, MSA Capital, Shorooq Companions, Savola and others final 12 months. Capiter’s buyers declined to touch upon the matter however issued an e mail assertion.

The Board and shareholders have initiated an inner investigation and subsequently should not at liberty to touch upon the information or allegations circulating the social media in the interim. The Board and shareholders are additionally working intently with related stakeholders, authorized and HR groups in addition to the authorized authorities for an exterior investigation on this matter.”

In the meantime, in accordance with native studies, the corporate’s chief monetary officer Majid El Ghazouli will act as interim CEO. Mahmoud didn’t reply to remark. 

Replace: CEO Mahmoud Nouh, in response to the allegations, stated, “I deny the false allegations and that I haven’t acquired any official discover of what’s above [referencing the statement about his and Ahmed’s dismissal].”

It is a growing story…

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