Wasoko, the Tiger Global-backed Kenyan e-commerce startup and MaxAB, its Egyptian counterpart, will trim roughly 10% of the combined workforce of both companies, TechCabal has learned.
Both firms are in the early stages of integrating their operations ahead of the completion of a merger, which was announced in December 2023. Both companies employ around 4,000 people in Egypt and East Africa.
Employees were told about the cuts on a Google Meet call with no recording allowed, said one person at the meeting. “The Egyptian team from MaxAB is taking over the product and engineering teams,” the same person said.
Daniel Yu, Wasoko’s CEO, confirmed that affected employees have been notified and offered severance packages “in line with local laws.” Yu and Belal El Merghabel, MaxAB’s CEO, will remain leaders in the new entity.
Wasoko and MaxAB will also allow affected employees to keep their stock options after leaving the company. Employee stock options, which allow employees to own equity shares in their employer company over a certain period, are a common incentive startups use to attract and retain top talent.
Yu said part of the severance package it is offering affected employees will allow them to keep their stock options. Employee stock options are commonly forfeited when employees are fired for cause. When employees terminate for other reasons, companies usually buy back shares.
Over the lifetime of Wasoko, which has raised $143.6 million per Crunchbase data, has allowed employees with vested shares to sell stock three times.
In December, Wasoko and MaxAB announced they were in preliminary negotiations to form a single company in a “merger of equals.” According to an early MaxAB investor, a merger would create a unicorn with a combined gross merchandise value of roughly $50 million. The CEOs of MaxAB and Wasoko declined to comment on the expected valuation of the new firm.
Venture capital investors have poured money into entrepreneurs building tech companies that focused on bringing Africa’s informal wholesale market for consumer goods online.
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