San Francisco-based startup accelerator Y Combinator, which helped accelerate Airbnb, Dropbox and Stripe, has taken a 7% stake in Chari. Chari, which is closely linked to major Moroccan distributor Dislog, will join the accelerator from July to September, before being showcases to international VC firms.
Chari launched in Casablanca in January 2020. It is a Moroccan digital buying platform for traditional retailers and in January 2021 had acquired 10,000 retail customers. It claims to be experiencing monthly growth of more than 10% and aims to have a turnover of $20m by the end of 2021.
Chari is backed by HnS Invest Holding, the same Moroccan conglomerate that owns blue chip distributor Dislog. Co-founder Ismael Belkhayat is the brother of Dislog CEO Moncef Belkhayat. Dislog launched its funding arm in September 2018 to support innovators and disruptors in Morocco, and funded Chari.ma’s seed round. Dislog has a fleet of 728 vehicles, coverage across Morocco and represents companies including P&G, Kellogg’s, Mars, Beiersdorf (Nivea), Coty, Jacobs Douwe Egberts, Duracell, British American Tobacco and Edita. Chari also distributes these brands.
In December 2020, Chari won Orange Ventures’ Middle East and Africa Seed Seed Challenge, beating out 500 other candidates. That month Orange Ventures acquired a 2% stake for what has been reported as $200,000, valuing the platform at $10m.
Chari (chari means “buyer”) operates a model that self-funds its stock requirements. Its retailers pay cash on delivery. Using its connection with Dislog, Chari pays its suppliers (the FMCG companies) on 30-45 day payment terms. As such it has 15-30 days or working capital.
At the beginning of 2021, Chari expressed an ambition to expand into Tunisia, Algeria, Côte d’Ivoire and Senegal during the year. We think it is unlikely to move into Algeria quite yet, and is more likely to focus on Tunisia. After that, it is hard to predict. Moroccan companies have strong links into Algeria, Côte d’Ivoire and Senegal but we think investors will want the company to nail down its position in Morocco before expanding too quickly outside the country.