A $125 million Series B equity investment for Sokowatch, an African e-commerce firm that uses revolutionary technology to revolutionize the informal retail supply chain, has been announced today, making it Africa’s second largest non-fintech startup round after Andela’s.
“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,” Daniel Yu, CEO and Founder of Wasoko, said.
An impressive group of investors, including Tiger Global and Avenir Growth Capital, as well as well-known figures such as Binny Bansal (co-founder of the online retailer Flipkart) and Sujeet Kumar (co-founding partner of the startup Udaan), have joined the round, which is being led by Tiger Global.
Additionally, Sokowatch is now open in Abidjan, Côte d’Ivoire and Dakar, Senegal — the company’s first facilities in West Africa — as it works to transform Africa’s $600 billion informal retail sector by improving customer access to goods. The company has changed its name to Wasoko, which means “People of the Market” in Swahili, in light of its expanding operations throughout Africa. From its roots as a backend distribution software platform in East Africa to a public brand that provides free delivery of critical products and working capital finance to informal retailers across the African continent, the company’s new brand emphasizes its transition.
Wasoko will be able to use the new funds to continue expanding its geographic reach and expanding its product line across the entire continent of Africa. It is looking into expanding into Nigeria and Southern Africa while maintaining its market-leading position in the six countries in which it already operates. Additionally, Wasoko is looking at ways to expand its product line to include verticals like as POS systems, bill payments, and social commerce through both internal innovation and strategic acquisitions of relevant companies.
Why The Investors Invested
The startup has generated considerable traction since its launch in 2016. More than 2.5 million orders have been delivered to more than 55,000 informal shops across the countries of Kenya, Tanzania, Rwanda, Uganda, Côte d’Ivoire and Senegal since the firm launched in 2016. Revenue has increased by more than 500 percent in the last year. A true Pan-African firm, Wasoko has grown to employ more than 800 full-time staff members across the African continent, each of whom is also a shareholder in the company as a result of Wasoko’s philosophy of universal employee equity.
“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,” Andrew Sugrue, Founding Partner at Avenir Growth Capital, said.
There has never been a non-fintech venture capital round in Africa larger than Wasoko’s Series B after Andela’s. Wasoko has also hired Udaan Co-Founder Sujeet Kumar to its Board of Directors to give strategic leadership for the company’s continuing expansion, in addition to the record raise and rebrand.
A Look At What The Startup Does
Founded in 2016, at any time of the day or night by SMS or mobile app, informal sellers can order products from Wasoko’s platform for free same-day delivery to their stores. Retailers can use Buy Now Pay Later financing through the platform, which analyzes historical purchasing data.
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As Wasoko expands its footprint in Africa, it has brought on new faces to its senior leadership team, including Mellany Msengezi (formerly of Airtel), Aurelien Barreau (formerly of Carrefour), and Georges Bejjani (formerly of Jumia), all of whom hold key positions. A variety of positions are presently open at Wasoko, including Chief Operations Officer, Chief Product Officer, and Engineers/Product Managers at every level.
The great majority of Africa’s population is supplied by informal retail channels, which sell about $600 billion worth of commodities each year. Because of this, informal retail remains highly fragmented and inefficient. Local shops face a wide range of difficulties, including frequent stockouts, limited access to finance, and difficulties acquiring items from suppliers.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer