Sokowatch raises $2 million to connect Kenya’s informal retail stores directly to manufacturers


Kenya’s Sokowatch has raised $2 million seed investment led by  4DX Ventures with participation from Village Global, Lynett Capital, Golden Palm Investments, and Outlierz  Ventures according to a report by TechCrunch.

Peter Orth, Co-Founder and Managing Partner at 4DX Ventures, will join Sokowatch’s board of directors to help the firm put the power of e-commerce in the hands of informal retailers in Africa’s cities where there are more than 10 million informal shops selling over $180 billion worth of goods every year.

Sokowatch enables informal retailers to order products at anytime via SMS or mobile app, and receive free same-day delivery to their store. This makes it easier for shopkeepers to source goods and helps manufacturers ensure that their products are consistently available to consumers. Sokowatch leverages historic customer data to provide them with access to credit and other financial services typically not available to informal businesses.

The firm’s system tracks real-time sales and orders across thousands of stores, gives them access to market trends and purchasing habits so that manufacturers can tailor their marketing strategies to individual retailers. The firm is working with firms such as Unilever and Proctor and Gamble among others.

“With both manufacturers and the small shops, we’re becoming the connective layer between them, where previously you had multiple layers of middle-men from distributors, sub-distributors, to wholesalers,” Sokowatch founder and CEO Daniel Yu told TechCrunch.

“The cost of sourcing goods right now…we estimate we’re cutting that cost by about 20 percent [for] these shopkeepers,” he told TechCrunch.

Sokowatch earns a commission on sales to shopkeepers and has now delivered 100,000 orders to its customers. Sokowatch also offers loans as working capital loans to its clients. The firm has operations in Kenya and Tanzania and will use the funds to expand to new markets in East Africa.