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"B2B e-commerce is a terrible business, but an amazing Trojan horse."
Not quite Odysseus pitching Agamemnon at the gates of Troy, granted, but as explanations for the post-crash B2B marketplace category go, it's highly effective.
The line comes from Ismael Belkhayat, founder of the Moroccan platform Chari, which was once held up as proof that digitising the corner shop's procurement could become a venture-scale e-commerce business in its own right.
Belkhayat now sees that business less as the destination than the price of admission.
"Even with my investors, I don't explain anymore what e-commerce is," he says. "I just say, look, I have marketing costs."
It's not an isolated piece of founder contrarianism. Across the survivors, the same pattern keeps cropping up in funding structures, product launches, acquisitions and worship at the altar of payments, credit and supplier services.
It’s not that the marketplace has disappeared so much as it's been demoted.
There's a widely understood acknowledgement now that the order has to become something more valuable than the margin on the order itself. And while many a mortally wounded category has reached for fintech with its dying breaths, the fit here is convincing on paper.
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B2B marketplace behemoths spent hundreds of millions acquiring a customer base that is enormous, painful to reach, chronically underserved by banks and already onboarded. The order history is sitting there, telling the platform what each shop buys, how often, from whom and, in some cases, how reliably it pays.
Just as importantly, there’s trust, hard-won and built over time through a frequent, useful interaction that made the merchant's life a little easier.
Layer a financing product on top of that, and the marginal cost of reaching the customer falls sharply because the customer is already inside the building. Layer a second product on, and it gets harder for the merchant to extricate themselves from the ecosystem.
The marketplace shows what products are needed, where demand is forming and how procurement moves geographically. The ledger, payment rail or POS tool then pulls the merchant further into the system, making the product stickier while giving the platform a clearer view of how the business actually operates.
Many of our protagonists from the first instalment have coalesced around the same idea.
Chari has recast e-commerce as a customer-acquisition cost and uses both its residual marketplace and Karny, its free ledger app, as hooks into payments and lending. Cartona and OmniRetail have leaned into embedded finance, supplier enablement and manufacturer visibility.
MaxAB-Wasoko and SILQ have, in different ways, bought or built merchant-service rails to see more of the transaction history sitting around the order.
The clearest vote of confidence in the model conveniently landed only just this week.
SILQ, the umbrella formed by last year's merger of Bangladesh's ShopUp and Saudi Arabia's Sary, announced it had closed $100 million in cumulative financing facilities for its embedded-finance platform, Fina.
The money arrived in Shariah-compliant tranches from Fasanara Capital, Gemcorp Capital and Amwal Capital Partners, earmarked for working capital delivered inside the digital tools merchants already use to buy, sell and collect.
The giant equity cheques that once subsidised delivery have given way to credit capacity for the businesses behind those very same baskets.
The timing is hardly coincidental, with private credit and venture debt having proliferated in the Gulf over the past two years, with a surge in funds eager to deploy.
And it just so happens that the thing these platforms can now produce, at least in theory, is exactly the sort of asset lenders can persuade themselves they understand i.e. small, frequent, short-tenor receivables tied to repeat trading relationships, goods already moving through the system, and customers with some history of repayment.
So, we have a customer base already bought, a product the customer actually needs, and capital markets newly willing to fund it.
To see how it works, it helps to stop looking at the platforms and look at the merchant instead, because the products arrive in a fixed sequence like rungs on a ladder.
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The first rung is goods. Stock, delivered, at a fair price. That's the problem the first wave set out to solve, and as we saw, it's the rung with almost no margin in it.
The second rung is visibility. A ledger app to track who owes what, a POS terminal to take card payments, a way to stop guessing at stock levels and cash position. The merchant gets a clearer view of the business. So does the platform.
The third rung is liquidity. Working capital to buy stock before it's sold, credit to accept a bigger order, financing to bridge the gap between paying suppliers and getting paid. This is only underwritable because of the second rung, and it's where the margin finally shows up.
The fourth rung isn't the merchant at all. It's everyone above; the wholesalers, distributors and manufacturers who’ll pay for access to the demand, the data and the distribution the first three rungs created.
What follows is how it all works. What these companies are really selling now, who’s paying for it, where the margin sits, and how the pieces the first wave built for one purpose turned out to be the first rung of something else entirely.
First, the goods
The base rung is the one the first wave spent more than a billion dollars trying to solve, the unglamorous, unforgiving business of getting stock to stores reliably, and at a price the merchant could live with.
As Part One laid out, there was almost nothing in it commercially for the marketplaces, with three to six points of gross margin often eaten by delivery before anything else got paid.
But the thing too often readily glossed over is…
