FinTech Collective has announced its investment in Sabi, a fifteen-month-old Lagos-based startup that is producing huge efficiencies across Africa’s hyper-fragmented supply chain.
Sabi navigates this intricate network, connecting wholesalers, distributors, merchants, and agents. Sabi’s approach drew us in since it emphasized supporting much of the existing chain of relationships rather than attempting to disintermediate any particular player. The strategy is working, as Sabi has already processed $280 million in transaction volume among roughly 200 thousand partners in the fifteen months since its start.e
Read also A New Regulatory Office Dedicated To Fintech Launched By Central Bank of West African States
We are very happy to have FinTech Collective on board. As we grow out our embedded finance stack, their track record in Africa with Flutterwave and their experience growing fintech enterprises globally is very welcome towards helping us serve the market the right way. We look forward to working together to bring the most innovative and valuable products to our users,” Anu Adesolum, CEO — Sabi
FinTech Collective joins the Sabi team as a board observer as a result of this investment.
Last year, Sabi closed a $6 million bridge deal led by CRE Ventures, a pan-African VC fund. Sabi’s bridge investment came a year after the company raised $2 million from CRE Ventures, Jaango Capital, Atlantica Ventures, and Waarde Capital in a seed round.
Read also DPO Group Enables USSD Payment Option in Nigeria
Why The FinTech Collective Invested
“Since meeting the dynamic founders — Anu Adesolum (CEO) and Ademola “Demmy” Adesina (Corporate Development & Embedded Finance) — we have continued to track their speedy and steady journey scaling the business. We’ve been continually impressed by the thoughtfulness and sophistication with which they approach every aspect of their work. Beyond the duo’s track record building another venture-scale company together, both have notable, complementary backgrounds. Anu led Jumia’s J-Force team across East and West Africa, while Demmy has worked across several financial firms including JPMorgan, Capricorn Investment Group, and the Sainsbury Family Office,” the startup said in a statement.
The informal economy is Africa’s economic engine, accounting for 98 percent of all retail transactions in Nigeria alone. Currently, suppliers and vendors in these markets use informal procedures and processes. As transactions become more digital, issues (and, more importantly, possibilities) emerge. As the shift away from physical shops has progressed, B2B marketplaces that serve the whole supply chain, from producer to merchant, have arisen.
A Look At What Sabi Does
Sabi was spawned out of Rensource which has been led by Ademola Adesina and Anu Adasolum since its inception in 2015 (with Adesina serving as founder and CEO and Adasolum as COO), after the founders investigated the additional issues that their Rensource customers were experiencing, beyond energy. Sabi was birthed in October 2020, with Rensource’s business halted by the epidemic.
Read also: Atlantica Ventures, Again, Leads $3.5m Seed Round In Nigerian Fintech API Startup OnePipe
Following Sabi’s branch out, Adasolum serves as the company’s founder and CEO, while Adesina serves as a co-founder and director.
Sabi is an attempt to use multiple online and offline platforms to platform the informal sector and African trade. This implies Sabi aims to supplement rather than replace the middlemen (mostly distributors) in the B2B e-commerce retail chain, a model similar to that of other well-known B2B e-commerce retail businesses such as Sokowatch, MaxAB TradeDepot, and Twiga.
“We’re not trying to be, you know, a tech-enabled digital distributor. We’re not trying to disintermediate a market full of hyper-specialization where one of the defining characteristics of the informal sector is you have all these middlemen and agents performing a very narrow role,” Adesina said.
“We think that specialization is important for the sector to work properly — whether it’s aggregation, making a sale, knowing the customer especially well, all these middlemen play a key role. And the way we deal with them is we give them a set of tools and an infrastructure they can run their business on to make it more optimized.”
Sabi provides services to manufacturers, distributors, wholesalers, and retailers, classifying them all as merchants.
The company uses an asset-light approach, which means it doesn’t own any trucks, warehouses, or inventory. However, it enables visibility into these assets from both the demand and supply sides, as well as controls, on a single platform.
Read also: Congo DRC Contracts Local Startup Schoolap To Digitize Its Entire School System
Sabi is free of the limits that a conventional B2B e-commerce retail platform could encounter while operating as a distributor for manufacturers to retailers when using this approach.
Sabi earns money by charging merchants a transaction charge when they make a sale on the marketplace. For providing customers with financing, the corporation gets a profit.
Last year, the company opened its doors in Kenya, and it has recently made a few hires in South Africa, with plans to go online this year.
FinTech Collective Sabi FinTech Collective Sabi
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh