Founders Of Egyptian Ecommerce Startup Capiter Fired By Board Amid $33M Funding Allegations

According to minutes from a recent meeting of the board of directors of Capiter ’s holding company, Mahmoud Noah and Ahmed Noah were removed from their executive positions as Co-Founder & CEO and Co-Founder and Chief Commerical Officer, respectively, effective September 6, 2022.

Capiter is the leading Egyptian company in the field of electronic commerce, specialising in serving merchants.

This decision was reportedly made because Mahmoud and Ahmed Noah, the company’s founding partners, have been shirking their responsibilities and have ignored repeated requests from the Board of Directors, shareholders, and investors to appear at the company’s headquarters ( during the company’s annual shareholder meeting) so that they can complete due diligence procedures in preparation for a possible merger with another entity over the past week.

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The Board of Directors has since appointed Maged Al-Ghazouli, Capiter’s Chief Financial Officer, to serve as interim CEO until Mahmoud and Ahmed Noah make a personal appearance before the Board, shareholders, and investors to address concerns from employees, suppliers, creditors, and other stakeholders, and to continue negotiations with the entity planned to merge with Capiter.

Allegations Of Missing $33 Million Funding

  • Employees of Kapiter who have taken to social media to spread the company’s news have accused the Noah brothers of absconding with $33 million — the value of the funding that Kapiter obtained from a group of investors — and using it to fund a vacation outside of Egypt. 
  • Kapiter secured $33 million in a seed fundraising round last September, including contributions from Kona Capital, MSA Capital, Savola, Shorouk Partners, Foundation Ventures, Accion Venturelab, and Derayah Ventures. A co-founder and managing partner at Kona Capital, Monica Brand Engel, remarked at the time that Kapiter’s funding round was one of the largest seed funding rounds for Egyptian startups ever, reflecting the great confidence of investors in the company. 

“When your tech firm is lucrative enough to entice investors from abroad. It’s analogous to how a hummingbird spreads pollen across several blossoms,” she said, at the time. 

  • This was the first step in Quona Capital’s investment in Egypt, where the firm said it found a friendly climate for financial technology owing to the efforts of the country’s president, government, Central Bank of Egypt, and Financial Supervisory Authority.
  • After receiving funding from Quona, MSA Capital, and Savola, the business reportedly ran into operational issues that resulted in some layoffs, prompting investors to look for a way to combine with another company. 
  • There have been rumours that founders Mahmoud Noah and his brother Ahmed Noah had left the country.
  • Before launching Capiter, Mahmoud Noah co-founded the smart ride-sharing company SWVL, a mass transit company based in Egypt that went global after striking a merger deal with the special purpose acquisition company Queens Gambit Growth Capital and listing its shares on the Nasdaq Stock Exchange in the United States and and expanding other countries in Europe and Latin America.
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The team at Capiter: Image credits: Capiter

A Look At What Capiter Does

Mahmoud Nouh and Ahmed Nouh founded Capiter in July 2020. Capiter, according to CEO Mahmoud Nouh, solves difficulties for suppliers and manufacturers in terms of reach and insights. Merchants can order products from FMCGs and wholesalers through Capiter, and the company will deliver them. Capiter also offers retailers fair pricing and matching procedures that allow them to see a wide choice of merchandise.

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Capiter’s platform supports over 12 different merchant categories, including mom-and-pop shops, hotels, restaurants, cafes, electronic stores, supermarkets, grocery stores, and catering organizations, all of which have their own unique solutions.

The company’s profits come from small margins on products purchased from manufacturers and sold to retailers. Then there are rebates for suppliers and commissions from merchants’ working capital. Capiter also makes money by providing market research and data services to manufacturers and fast-moving consumer goods companies.

Typically, B2B e-commerce platforms follow one of two models: asset-light or inventory-heavy. Capiter chose a hybrid model, according to Nouh, by making deliveries without owning any trucks in order to ensure scalability and inventory ownership, especially for high-turnover products, which helps the company with high availability and better pricing.

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Capiter claims that machine learning assists these manufacturers in gaining essential insights into the markets they service, the products they sell, and how they compete.

“We’re able to get the data from the products they buy. So we offer them the best solution on what they should sell, at what time and peak seasons, including when are the offerings happening. All of these are customized solutions that we offer,” said Mahmoud Nouh.

Capiter has a fleet of more than 400 vehicles, provides services through a network of more than 50,000 dealers, and offers more than 5,000 products through its platform, all while seeing an 11-fold growth rate annually.

The company’s personnel, as well as its offering of financial services through partnerships with banks and its hybrid model, are ways it distinguishes apart in a market crowded with companies like Fatura, Bosta, and MaxAB.

Capiter ecommerce founders Capiter ecommerce founders Capiter ecommerce founders

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. 
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexpert