Dubai: UAE based Crescent Enterprises has joined a consortium of investors in a new e-commerce and logistics venture from the Mara Group and targeted at the African markets. The strategy is to have the operations of Mara Shopping and Mara Xpress up and running before year-end, with the Continent’s e-marketplace expected to bloom into a $75 billion powerhouse by 2025. It is now estimated at $1 billion.
The size of the funds put up by Crescent Enterprises was not revealed. But it is the first time that the entity is committing an investment into a tech company directly. Earlier investments have been for late-stage tech startups in the US and were done in tandem with partners.
The launch market for Mara Shopping will be decided within the next few weeks, according to a senior Crescent official. The prime prospects include Nigeria and South Africa.
“With the Mara exposure, we have also changed our ways by committing to an early round of funding,” said Tushar Singhvi, Vice-President for Corporate Development & Investment at Crescent Enterprises, in an interview with Gulf News. (Crescent Enterprises itself part of a group that also owns Crescent Petroleum.) “We have known the Mara Group for some time now, and felt it was the right time to explore Africa’s e-commerce possibilities.”
Whether this was the first funding into Africa, Singhvi said: “Through our group interests — most notably Dana Gas — we are already well represented in that market.”
The Mara Group, based in Dubai, has existing interests in Africa’s real estate, financial services (through Atlas Mara founded in last 2013 and revenues of $205.2 million in 2015), trading and agri sectors, with e-commerce being the latest addition. Atlas Mara’s founders are Ashish Thakkar, founder of Mara Group, and Bob Diamond, the former CEO of Barclays.
Portal, logistics
While Mara Shopping becomes the e-commerce portal, the other venture being launched simultaneously — Mara Xpress — will provide the “last-mile logistics”. According to the promoters, the portal could be in a position to be regarded among the top e-commerce platforms in Africa by 2020. The platform will “facilitate global brands to sell locally to African audiences, as well as African brands to sell nationally, regionally and globally”, the Group said in a statement.
Africa’s retail sector mirrors what the Gulf markets experienced a decade ago. Malls are being developed across the continent, and the emphasis clearly has been on brick-and-mortar. But e-commerce has the wherewithal to develop from its current value of $1 billion, given the heavy investments made into telecom infrastructures by the leading operators. Heavily localized e-commerce startups are being launched.
Where Mara — and Crescent by extension — hopes to benefit is by having a simultaneous rollout in all of the key markets. And also by having its own logistics facilities to make those deliveries rather than rely on third-party providers.
“We will also follow a different approach from current players in the market as Africa’s first two-way marketplace,” said Ashish Thakkar, Founder, Mara Group. “Through our collaboration with the consortium of investors, we have the opportunity to launch the platform later this year and really test and fine-tune the business model, which we believe will be key to scaling up and succeeding in the African market as a whole.”
