Morocco’s Chari secures $100M in a bridge round.

New investors in the bridge round included Khwarizmi Ventures, Air Angels, and Afri Mobility, AKWA Group’s venture capital arm.

Y Combinator, Rocket Internet, Global Founders Capital, Plug n Play, Orange Ventures, Harvard University Management Company, Village Capital, and P1 Ventures were among the previous investors in Chari’s $5 million seed round, which raised $70 million in October.

Chari digitizes the largely fragmented FMCG business in Morocco and Tunisia, like many other B2B e-commerce startups throughout the continent.

Chari is a mobile app that allows small businesses in these two nations to order products from collaborating FMCG corporations and local manufacturers and receive them in under 24 hours.

Karny.ma, a Moroccan ledger book, was bought by the YC-backed business last October. About 50,000 retailers use the Khatabook-like platform for credit and bookkeeping. It enables these businesses to manage the credit they extend to their customers.

The acquisition of Karny and the bridge round are part of Chari’s goal to provide payment services. It puts the company in a great position to offer financial services to its retailers, particularly buy now, pay later.

“Chari will use the funds from this bridge round to put BNPL’s services to the test with its current clients.” Chari will buy a local credit company if the findings are positive, allowing shop owners to lend money to their customers and expand their business, according to CEO Ismael Belkhayat in a statement.

Karny provides Chari with crucial information about the loans that grocery businesses issue to their consumers, allowing Chari to credit-assess unbanked shop owners and determine the most appropriate payment terms for each.

In summary, Karny data enables Chari to learn about the things sold by shop owners to their end customers, as well as the amount lent.

Chari will now offer payment terms and BNPL alternatives to some of its shop owners based on their date of registration, order frequency, average basket order, and amount of money lent to their end users via its internal closed-loop digital wallet.

Chari has chosen a few business owners to try this, according to Belkhayat, who co-founded the company with Sophia Alj. Merchants can have a negative balance on their digital wallets if they meet the four criteria; the limit is -$100 to -$500 and they can only keep it for 30 days without being charged.

Chari intends to expand this BNPL service to Tunisia and other French-speaking countries in Africa once it has perfected its operations in Morocco.

Due to the fast adoption of e-commerce and the pandemic’s consequences, BNPL services are beginning to see significant growth throughout Africa.

Several BNPL services cater to consumers, such as Carbon Zero in Nigeria, Payflex in South Africa (recently acquired by Australian BNPL Zip), and LipaLater in Kenya (recently raised $12 million in equity and debt).

Others serve businesses like TradeDepot, a Nigerian company similar to Chari, while some make infrastructural plays like Nigeria’s ThankUCash.

Companies typically raise debt financing for their BNPL projects; as previously stated, the majority of the participants have done so.

Chari, on the other hand, chose not to. The reason, according to Belkhayat, was that the debt venture funds with which Chari was in talks wanted to charge the company interest rates as high as 15%.

“Since this is simply a pilot, I prefer to raise the money at a high value from funds that could support me with my approach.”

He explained Chari’s high seed value and why it only raised stock. “I get a little diluted, but in exchange, I receive a lot of advice from experienced founders,” he remarked.

“If the pilot is a success, I’ll need a lot more money for working capital, therefore I’ll raise debt instead of diluting equity.”