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VNV Global, a Swedish investment powerhouse renowned for its support of startups in mobility, health, and marketplaces, has made waves with a significant markdown in the valuation of its holdings in Wasoko, an African B2B e-commerce venture. According to its latest annual report for 2023, VNV slashed the value of its stake in Wasoko by a staggering 48%.

In its report, VNV pegged Wasoko’s fair value at approximately $260 million as of December 2023, coinciding with the startup’s announcement of its impending merger with Egyptian counterpart MaxAB. This valuation reflects VNV’s 4.2% ownership stake in Wasoko, valued at $10.9 million.

This markdown isn’t VNV’s first adjustment regarding Wasoko’s value. In the fourth quarter of 2022, the investment firm valued Wasoko at a lofty $501 million, shortly after the startup closed a substantial $125 million Series B funding round led by Tiger Global and Avenir. However, complications arose when it was revealed that Wasoko had only received $113 million of the total funding disclosed. VNV had contributed $20 million to that round.

VNV Global attributes its current fair value assessment to a valuation model grounded in trading multiples of public peers rather than historical funding rounds. Despite the markdown, Wasoko remains steadfast in its commitment to the long-term vision, with the Tiger-backed company affirming VNV’s continued support and active involvement in the company’s trajectory, notably through its merger with MaxAB.

The report from VNV Global, which also boasts investments in prominent entities like Blablacar and Gett, predates the merger announcement with MaxAB. However, the investment firm, previously known as Vostok New Ventures, asserts its intention to retain its stake in Wasoko post-merger, citing a penchant for long-term investments and the potential for significant growth in the combined entity.

As one of Africa’s premier B2B grocery marketplaces, Nairobi-based Wasoko has forged partnerships with major suppliers like P&G and Unilever, offering goods at competitive prices while bypassing intermediaries. Founded by Daniel Yu in 2014, the company has demonstrated consistent growth, expanding across six African markets by 2022 and reporting $300 million in gross merchandise value (GMV) annually. Despite the challenges facing B2B e-commerce startups, Wasoko remains resolute in its pursuit of profitability, implementing strategic measures to navigate the evolving landscape.

As Wasoko and MaxAB brace for their merger, both entities envision a synergistic alliance that will chart a new course in Africa’s B2B e-commerce sector, offering a beacon of hope amid the tumultuous journey toward profitability.