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Sunday, 19 December 2021

Filkhedma acquired by SA’s SweepSouth in multi-mn USD all-stock transaction

Filkhedma is under new management: South African home services firm SweepSouth has acquired 100% of Cairo-based startup Filkhedma, the companies said in a joint statement (pdf). The transaction will see the company’s existing shareholders — which include Algebra Ventures, Glint Consulting and angel investor Khaled Ismail — take shares in SweepSouth, Filkhedma founder and CEO Omar Ramadan told Enterprise. Ramadan declined to disclose the terms of the agreement but told us the shares obtained by Filkhedma shareholders are worth “a few mn USD.”

The new owners: Launched in 2014, SweepSouth is Africa’s largest home services platform. It operates in South Africa, Nigeria and Kenya, according to the statement. It will now have a presence in three Egyptian cities through Filkhedma, which has more than 2k cleaning, maintenance and beauty services providers on its network.

Expect a squeakier clean from Filkhedma: The acquisition will see Filkhedma benefit from SweepSouth’s experience to upgrade its home cleaning services, Ramadan told us, noting that home cleaning is the largest vertical in the home services sector across Africa. An outdoor cleaning and gardening service, already available in SweepSouth’s existing South African, Kenyan and Nigerian markets, is also in the works, while Filkhedma will also see software updates on the back of the acquisition.

And a wider range of services in SA: SweepSouth, meanwhile, will be adding Filkhedma’s home beauty services and a wider range of maintenance options to its South African offering at some point in January, Ramadan told us. The South African company expects the acquisition to almost double the company’s potential market on the continent.

The takeover announcement comes just a few days after the company secured a new round of investment from the Cairo Angels, which Ramadan tells us was part of a larger bridge round meant to ensure that the company was well-capitalized and continued to grow as the acquisition was being negotiated. The round was the startup’s fourth, with earlier rounds raised from Algebra Ventures, Glint, and Ismail’s KiAngel.

An “aggressive” expansion plan set to start in March 2022 will see the company add three new markets next year, two on the African continent and one beyond Africa and the Middle East, Ramadan said. The company is also planning a marketing campaign set to launch in the first quarter of 2022 with the aim of growing Egypt-based business by 5-10x over the course of the next year, he said.

Management is restructuring: Following a three-month transition period, Ramadan (LinkedIn) will become the chief business officer for the combined entity, working across the company’s markets. The wider Filkhedma managing team will also see a shake-up, with staff taking on new roles both locally and regionally.

Exits: the future of our startup scene? As new funding pours into our local startups, startup-to-startup acquisitions are likely to become more common, local players told us last month. Filkhedma joins the handful of homegrown names to be acquired by international players, including Egyptian matchmaking app Hawaya (formerly known as Harmonica), which was acquired by Tinder parent company Match Group, and food-ordering platform Otlob, which Delivery Hero bought and later rebranded as Talabat.

WHAT’S NEXT- Enterprise expects more M&A from Planet Startup as we enter next year, especially in logistics, last-mile delivery, fintech, healthtech and edtech.

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