B.TECH, Egypt’s Largest E-Commerce Platform, Sells 34% Stake to Saudi Egyptian Investment Company
B.TECH, Egypt’s omnichannel retailer and consumer finance platform, has sold 34% of its stake to the Saudi Egyptian Investment Company (SEIC), a subsidiary of the Saudi Public Investment Fund, in a $150 million deal as the Saudi Public Investment Fund looks to expand in Egypt.
SEIC is acquiring a minority stake in African Development Partners II, a fund advised by Development Partners International (DPI), a UK-based investment firm focused on Africa’s high-growth, impact-driven, and innovation-led businesses. DPI purchased 33.3% of B.TECH in 2016 for $35 million. Meanwhile, the Khattab family’s BT Holding owns the remaining 66% of BTech.
This is SEIC’s first investment after acquiring minority stakes in August in four companies listed on the Egyptian Stock Exchange – Abu Qir Fertilizers and Chemical Industries, Alexandria Container, and Cargo Handling, E-Finance for Financial and Digital Investments, and Misr Fertilisers Production Company- for about $1.3 billion.
B.TECH’s CEO’s Remark
Mahmoud Khattab, Founder, and CEO of B.TECH, in a statement on Monday, said “Working with SEIC, B.TECH will continue to accelerate its innovative growth strategy, and its digitalization efforts, while scaling new business verticals and existing core operations. B.TECH will also invest in increasing financial inclusion efforts, supported by the growth of B.TECH’s digitally-enabled MiniCash consumer finance services, which will expand customer access to a wide range of financing solutions.”
Khattab, further disclosed that SEIC will appoint two members to the company’s board.
“In recent years, we have achieved significant milestones, rapidly expanded our e-commerce business, and grew our store footprint, distribution and service centers, while also enhancing our digital capabilities,” Khattab explained.
Mahmoud Khattab, Founder, and CEO of B.TECH
“With SEIC as an investor, we aim to continue to progress our ambitions.”
Khattab also added that the company will invest more in talent, create new jobs, and support the professional development of its employees.
The transaction’s M&A advisors were Arqaam Capital and EFG Hermes, while the financial advisor was PWC. White & Case and Akin Gump served as international legal counsel, and Matouk Bassiouny & Hennawy and Zulficar and Partners served as local counsel.
According to a LinkedIn post by SEIC, BTech has grown into “one of Egypt’s largest and fastest-growing e-commerce players and the country’s leading omnichannel retailing platform, making it a promising strategic partner for the Saudi Egyptian Investment Company.”
B.Tech, which was founded in 1997, operates 143 stores in Egypt, selling consumer electronics and home appliances. Online sales account for approximately 20% of BTech’s revenue.
The company also offers consumer financing through its MiniCash service and launched its business-to-business marketplace deal in August. The app provides product listing, inventory management, delivery, marketing solutions, analytical tools, and training courses to small and medium-sized businesses.
Since the DPI investment in 2016, BTech has expanded both online and offline, more than doubling the number of stores. According to the company, its revenue increased fivefold and its net income increased tenfold during that period.
Khattab stated that the company has invested more than 400 million Egyptian pounds ($20.3 million) in digital transformation over the last three years and plans to invest an additional 1 billion pounds in the next three to four years. BTech is collaborating with management consulting firm McKinsey as it embarks on this new adventure.
In addition to the digital expansion, BTech intends to open ten new stores by the end of the year.
“We believe that e-commerce will never completely replace traditional retail.” Both are growing and positively helping each other,” Khattab said.
With approximately $620 billion in assets under management, the PIF is one of the world’s largest sovereign wealth funds. It is diversifying its investment portfolio to increase its asset base to approximately $1 trillion by 2025.
SEIC announced plans to invest in infrastructure, property development, health care, financial services, food and agriculture, manufacturing, and pharmaceuticals in Egypt.