Cairo-based B2B e-commerce startup Capiter has raised many questions after news circulated about major turmoil within the company

Newsletter

12 Sep 2022

Cairo-based B2B e-commerce startup Capiter has raised many questions in the startup and e-commerce ecosystem, after news circulated about major turmoil within the company. This threatens to burst the bubble of imaginary valuations for these types of companies, which were monitored in this piece. The board of directors of Capiter – working in the field of electronic commerce – decided to dismiss Mahmoud Noah (Co-Founder & CEO) and Ahmed Noah (Co-Founder and Chief Commercial Officer) from their executive positions, with a decision that will take effect immediately as of September 6, according to a statement issued by the company. We learned that the decision came after the brothers refrained from appearing before the board of directors after internal disturbances, and disagreements over their management method. They did not attend the meetings that were held because they were outside Egypt without a clear justification. News spread on social media that the brothers, Mahmoud Noah and Ahmed Noah, are not currently in Egypt, which was confirmed by sources close to the matter. “The reason was that they did not fulfil their obligations to civilians, investors, and contracted traders,” the sources said. Founded in 2020, the FMCG platform Capiter allows small and medium-sized retailers to order inventory, arrange delivery, and access financing to pay for merchandise. So far, Capiter has raised about $33m in funding from several global venture capital funds, co-led by Quona Capital and MSA Capital. Other participating investors include Savola, Shorooq Partners, Foundation Ventures, Accion Venture Lab and Derayah Ventures. Capiter funding round is one of the largest in the Middle East in 2020 after the “Halan” and “Maksab” rounds that year, and it is one of the largest funding rounds in the establishment stage ever, according to Magnett data. Mahmoud Noah, the company’s CEO, told Daily News Egypt in March that the company was arranging new $75m financing round during the second quarter of 2022, but the round did not come to light. Several investors and experts in the field of financial technology warned of the bubble valuations of startup companies and the valuations that have become exaggerated according to their descriptions. (Daily News Egypt)

Mahmoud Mohieldin, the climate champion for the Egyptian presidency of the 27th Conference of the Parties to the United Nations Climate Change Convention (COP27), estimated the volume of the funding gap for climate action globally to be $2-3trn annually.
Mohieldin added that it is unfair for developing countries to borrow and be burdened with more debt in order to fund the climate adaptation gap, which is only responsible, as a continent, for 2-3% of carbon emissions. He told DNE that 33 sustainable projects for African countries were agreed upon on the sidelines of the event, and details are scheduled to be announced during the coming period. He also stressed the importance of dealing with Africa as a key partner in climate action, and that it is time to strengthen partnerships with the African continent in the areas of water, energy and food as the current funding is considered insufficient. He stressed that work is currently underway to create a common carbon market, in order to provide sustainable financing for climate adaptation. He also emphasized the importance of establishing the Africa Network within the framework of the Glasgow Financial Alliance for Net Zero Emissions (GFANZ), and its importance in attracting more investments in financing climate projects in Africa. On the other hand, he stressed that international indicators show the increasing demand for food, water and energy as a first priority by 2030 at rates of 35%, 40%, and 50%, respectively, due to population growth, expecting that the population of the earth will reach 8 billion by the time the Sharm El Sheikh conference is held, and 8.5 billion by 2030. (Daily News Egypt)
In the lead-up to Egypt hosting the 2022 United Nations Climate Change Conference (COP27), Egyptian President Abdel Fattah Al-Sisi has met with Fortescue Future Industries (FFI) founder and Executive Chairperson Dr Andrew Forrest to discuss the development of green energy projects in the region.
FFI has already signed a Memorandum of Understanding (MoU) to conduct studies to develop green hydrogen production in Egypt. The meeting discussed the potential development of a green hydrogen production project with a 9.2 gigawatt (GW) installed capacity. Dr Forrest said, “Egypt is on the way to becoming a global powerhouse in the green energy value chain and will be ready to show the world that at COP27.” Dr Forrest said. “Egypt’s excellent wind and solar resources can generate the renewable energy required to produce large-scale green electricity, green hydrogen and green ammonia,” .FFI is a global green energy company committed to producing green hydrogen, containing zero carbon, from 100 per cent renewable sources. It is a wholly-owned subsidiary of global green energy and resources company Fortescue Metals Group ($33.75 billion market capitalisation. (Al Ahram)
Contact Financial Holding (CNFN) announced that its existing financing agreement with Capiter would not have a significant impact on the quality of Contact Leasing’s credit portfolio or the holding company’s profits.
It is worth noting that Contact Leasing previously signed a financing program agreement with Capiter at a value of EGP 100 million. These announcements come due to the recently circulated news on Capiter’s board of directors dismissing Mahmoud Noah and Ahmed Noah from their executive positions. Contact Financial Holding, formerly Sarwa Capital, is a non-bank financial services provider, changing the way people and businesses access finance and insurance. (Arab Finance)
Commercial International Bank Egypt (CIB) (COMI) has acquired a 15% stake in El Sewedy Engineering Industries (SEI), a subsidiary of Zaki El Sewedy Group.
The acquisition has been executed through a capital increase of SEI, Egypt’s largest private sector bank said. SEI will use proceeds from the transaction to finance future expansions in local and regional markets, CIB added. Through the capital increase, SEI targets raising its stake in Arab Industrial and International Trading Co to 68.14% and in Elsewedy Lighting to 66.67%. Meanwhile, CIB aims to boost the return on equity (RoE) in the bank through investing in the capital of SEI. The transaction comes in line with CIB’s notable role in providing direct investment services in companies as one of the financing solutions to meet the needs of customers. Ironwood Investments acted as the financial adviser on the transaction to SEI, while Talaat Law Office served as legal counsel. Furthermore, Ernst & Young Egypt and Intercap Capital were the financial advisers to CIB, and Matouk Bassiouny and Hennawy acted as the bank’s legal counsel. (Arab Finance)
El Sewedy Electric for Trading and Distribution, a subsidiary of Elsewedy Electric (SWDY), has signed three contracts for the establishment of South Valley development project in Toshka at a value of EGP 2.2 billion.
The South Valley development will cover the reclamation of 375,000 feddans on sub 4 and dash 4 for loads in O2, O5, and O8.The project is set to be carried out within a six-month period starting from the site receiving date. Elsewedy Electric is a leading integrated energy solutions provider in Africa and the Middle East, with a portfolio covering all traditional and renewable energy areas along with related services. (Mubasher)
The board of directors of e-finance for Digital and Financial Investments (EFIH) has agreed to the purchase of up to 5% treasury shares of the company’s total shares for nine months.
This decision will support the company’s stock price in the EGX and will reinforce investors’ confidence in e-finance and its future performance. The purchase of treasury shares will be implemented through the open market at the market’s prices. Moreover, the board has approved the decisions of the Compensation and Remuneration Committee regarding the activation of the employee stock ownership plan (ESOP) by 1% of the company’s shares, under which 0.25% will be currently disbursed. Founded in 2005, e-finance is the first fintech platform in Egypt and a leading digital payment infrastructures’ developer.(Mubasher)
The European Bank for Reconstruction and Development (EBRD) is providing a loan of $100 million to Banque Misr for on-lending to local small and medium-sized enterprises (SMEs) to support the green economy.
Following the success of the Green Economy Financing Facility (GEFF) in Egypt, this loan will bolster green lending in the country to underserved regions for investments in climate change mitigation and adaptation technologies. Under a technical assistance program funded by EBRD and Netherlands through the High Impact Partnership on Climate Action, Banque Misr will also receive €2.3 million to support the execution of the program and to raise awareness of green financing. The assistance program is also backed by Austria, Finland, Switzerland, TaiwanICDF, and the UK. (Arab Finance)
Emirates NBD Egypt has launched Taproot project in collaboration with ButtonUP, according to an emailed press release on September 11^th.
Taproot project aims at supporting societal efforts in combating climate change in line with Egypt’s preparations for the COP27 in November. The project offers locally-born solutions to mitigate climate change risks and bolster the environmental, social, and economic resilience of local communities. Under the project, training on environmentally friendly industries will be provided to women and youth in Izzbet Khairallah, which contributes to the capacity building of more than 180 women and youth from Izzbet Kahirallah. This will also help women and youth to produce and market high-quality, environmentally friendly products, including tires recycling, textile, pottery, and food products. (Arab Finance)
El Ezz Dekheila Steel – Alexandria (EZDK) (IRAX) reported a 98.9% year-on-year (YoY) hike in consolidated net profit after minority interest for the first half (H1) of 2022.
The company registered a consolidated net profit attributable to the holding company of EGP 4.071 billion in H1 2022, compared to EGP 2.047 billion in H1 2021. Net revenues grew to EGP 34.54 billion in the six-month period ended June 30th from EGP 26.51 billion in the same period last year. Moreover, the company recorded a standalone net profit after tax of EGP 3.36 billion in H1 2022, compared to EGP 1.59 billion in H1 2021, according to the standalone financial statement. El Ezz Dekheila Steel is an Egypt-based engaged in the manufacture and production of steel in different types and forms. The company’s direct subsidiaries include Al Ezz Steel Sheet Manufacturing Company, Steel Company for Industry, and Trade and Contracting Company, which is focused on the manufacture and trade in all types of metal and metal products. (Mubasher)