Sokowatch, the informal retail supply chain startup has closed a $125 million Series B equity round, officially launched in Abidjan, Côte d’Ivoire and Dakar, Senegal and rebranded to Wasoko, Swahili for ‘the market people” as it pursues product growth and expansion across Africa, fifteen months after its $14m series A raise.
The $125M Series B Round was led by Tiger Global and Avenir Growth Capital with participation from VNV Global, Flipkart‘s Binny Bansal and Sujeet Kumar (Co-Founder of Udaan), as well as existing investors Quona Capital, 4DX Ventures and JAM Fund.
According to Daniel Yu, Global CEO and Founder of Wasoko,“After more than six years building and constantly iterating on our operations, we are proud to have demonstrated the traction and quality of business required to raise funding from world-class investors. We’re fully focused on leveraging their strategic support to build one of the biggest e-commerce companies in the world and transform access to goods and services for African citizens across every corner of the continent.”
With the latest raise, the largest venture financing round ever raised for a non-fintech startup in Africa, Wasoko is exploring expansion into Nigeria and Southern Africa and also examining opportunities to expand its product offering to verticals such as merchant point-of-sales systems, bill payments, and social commerce through both internal innovation as well as strategic investments and acquisitions of relevant companies.
Over $600 billion of consumer goods are sold in Africa through informal retail channels every year, supplying the vast majority of the population. Despite the importance of the informal retail sector, the industry still remains highly fragmented and inefficient with local shops facing a number of major challenges including frequent stockouts, limited access to capital, and difficulty receiving goods from suppliers. Through Wasoko’s platform, informal retailers are able to order products at any time via SMS or mobile app for free same-day delivery to their stores. Leveraging historic purchasing data, the platform also evaluates retailers to provide them with access to Buy Now Pay Later financing.
In Nigeria, Wasoko will face off stiff competition from Omnibiz, Twiga, Sabi, MarketForce and TradeDepot among others (which have both recently raised significant funds for expansion) with its sole aim to revolutionize access to consumer goods across Africa’s $600 billion informal retail sector. TradeDepot recently raised $110 million to support the delivery of Buy-Now-Pay-Later services to 5 million SME retailers and drive further expansion of its merchant platform across the continent. On the other hand, MarketForce raised $40 million to scale merchant inventory financing through a BNPL offering, grow deeper in existing markets and avail more digital financial and banking services through its extensive merchant network. Egypt’s MaxAb aims to do the same for Egypt and the Maghreb region.
Sokowatch launched in Nairobi, Kenya in 2016 as a backend distribution software platform for the region but the pivot and the rebrand will help it pursue its dream of providing free delivery of essential goods and working capital financing and Buy Now Pay Later (BNPL) options to informal retailers across Africa. The firm has also appointed Sujeet Kumar, Co-Founder of Udaan – the world’s largest B2B retail e-commerce company – to its Board of Directors to provide strategic guidance for Wasoko’s continued growth.
Wasoko has delivered 2.5 million orders to over 50,000 informal retailers across Kenya, Tanzania, Rwanda, Uganda, Côte d’Ivoire, and Senegal with revenue growth over the past 12 months at over 500%. To strengthen its presence across Africa and consolidate its gains, the firm recently hired Mellany Msengezi from Airtel as its Head of Marketing; Aurelien Barreau from Carrefour as Head of Sourcing; and Georges Bejjani from Jumia as Head of Business Intelligence.
Andrew Sugrue, Founding Partner at Avenir Growth Capital, adds “Informal retailers capture the vast majority of consumer spend in Africa, and they are dramatically underserved by existing distribution and financial infrastructure. We’re excited about the category-defining, Pan-African commerce platform Wasoko is building and the efficiencies it brings to these retailers and their suppliers through a combination of superior product selection, logistics, and financial services.”