Kenya based B2B e-commerce startup Sokowatch has raised $14 million in Series A funding toward its mission of revamping supply-chain markets for Africa’s informal retailers.
“We’re looking to build out the largest B2B e-commerce network across Africa,” Sokowatch’s CEO Daniel Yu said.
Here Is The Deal
- This round of funding was led by Quona Capital joined by Amplo, Breyer Capital, Vertex Ventures, Timon Capital and repeat investor 4DX Ventures.
- With its Series A, the startup plans to broaden its client services — from working-capital to data-analytics — and target new African markets, according to CEO Daniel Yu.
- Sokowatch didn’t however name which countries in Sub-Saharan Africa it’s eyeing for expansion. The company’s CEO did confirm the startup could someday use the advantages of its platform to offer 3PL services or sell online directly to consumers in Africa.
“It’s within the power of our networks to do so” said Yu. “At the end of the day, we want to be the channel — both digital as well as physical — for transforming access to goods and services for these communities.”
- The Kenya-based Sokowatch also doesn’t rule out using its infrastructure to someday enter business-to-consumer online retail.
- For the moment, the startup’s primary business focus is to reduce costs and increase profit margins for small merchants.
Read also: Lessons Twiga Foods Has Taught Startups About Disrupting Africa’s Food Supply Chain
Why The Investors Invested
- The lead investor Quona Capital is empowering entrepreneurs building a more financially inclusive world by connecting them with the ideas, innovation, and capital they need to help solve challenges for the underserved in every corner of the world, from Mumbai, India to Monterrey, Mexico, and beyond.
‘‘With a massive transformation in connectivity and mobility, innovation is spreading around the globe more rapidly than ever before. These forces are fueling entrepreneurial creativity to address the needs of the billions of financially underserved people and businesses around the world lacking access to fundamental financial services such as credit and convenient, secure ways to store and use their money every day. We invest to benefit the financially excluded, connecting financial services with technology and cutting-edge innovation with everyday pain points.
Quona works shoulder to shoulder with entrepreneurs, investors, and strategic partners, with a holistic approach to venture capital investing, aligning value with values, profit with purpose, and combining financial return with social impact,’’ the VC Quona Capital notes.
A Look At What Sokowatch Does
- From Nairobi, the company has created a platform that connects merchants directly to local and multinational suppliers — such as Unilever and Proctor and Gamble — and digitizes orders, payments and delivery-logistics.
- Since launching in 2016, and raising a $2 million seed round in 2018, Sokowatch has expanded within Kenya and into Rwanda, Tanzania and Uganda.
- By Yu’s account, too many of Africa’s local merchants are sacrificing capital and incurring opportunity cost due to inefficient supply-chain.
- Sokowatch is shifting that scenario, according to its CEO, and now serves over 15,000 small retailers across its operating areas.
“We…estimate that we save merchants at least 20% on supply-chain costs for the goods we supply,” said Yu.
- Sokowatch offers retailers an app to order products from its partner suppliers and maintains a fleet of vehicles, primarily three-wheel tuk tuks, for delivery.
“We handle all of our last-mile logistics exclusively ourselves,” said Yu.
The startup is also generating additional enterprise services. “As part of the product we are developing other tools for merchants to directly manage other aspects of their business, especially when it comes inventory and overall sales,” said Yu.
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.
He could be contacted at udohrapulu@gmail.com