Chari, a Moroccan B2B e-commerce and retail startup, has acquired Axa Credit, the credit branch of Axa Assurance Maroc for $22 million .
The announcement follows Chari’s recently completed seed extension round, which valued the company at $100 million and saw it begin offering BNPL services to its customers. It is one of the few African startups that has made its valuation public.
In parts of French-speaking Africa, mainly Morocco and Tunisia, Chari digitizes the relatively fragmented FMCG sector. It operates a mobile app that connects small retailers in these two countries with FMCG multinationals and local manufacturers, allowing them to place orders and get products in less than 24 hours.
Karny.ma, a Moroccan credit book, was acquired by the YC-backed startup last October. About 50,000 merchants use the Khatabook-esque platform for credit and bookkeeping. It enables these businesses to manage the credit they extend to their clients.
The acquisition of Axa Credit — the Moroccan credit branch of the French-based Axa Group — makes Chari one of the few, if not the only, startups to acquire a local branch of a global bank. The acquisition is still subject to approval from the Moroccan banking, insurance and antitrust authorities.
With the acquisition of Axa Credit, Chari will be able to begin extending credit to its FMCG B2B clients (which it already does), who will then be able to lend money to their consumer clients. It’s a B2B2C lending model, if you will.
Shop owners, according to Chari, know their customers’ spending habits, where they dwell, and when and how they get paid, and can thus undertake the credit risk assessment that a regular bank cannot.
Shop owners and merchants can also provide FMCG on credit in addition to loans. Chari claims that the underbanked may now compete on an equal playing field with those who have bank accounts by providing loans and credit to businesses that function as branches and give the same services to end consumers.
Chari provides merchants with a free credit line; the cost of the loans is passed on to FMCG suppliers in the form of a higher distribution margin. Suppliers receive the data on the SKUs they sell to each retailer in exchange.
Chari provides greater credit lines to shop owners who want to offer loans to their end customers, and Chari shares the data collected from Karny (on end consumers’ purchasing behaviour) with FMCG companies who pay for the higher loans.
Chari intends to charge merchants a setup fee and low-interest rates in the future, after it has a larger user base.