Sabi - Afrikan Heroes

Sabi Secures $38 Million in Funding, Accelerating Growth in Africa’s B2B E-commerce Market

May 20, 2023

Sabi, a B2B e-commerce startup based in Lagos, is engaged in providing digital commerce infrastructure to Africa’s informal economy. Recently, the company successfully raised $38 million in Series B funding, with a valuation of $300 million. This development indicates a renewed interest from investors in the B2B e-commerce market, which is currently experiencing significant changes.

The funding round saw participation from notable investors such as CommerzVentures, a specialist fintech investor based in Frankfurt, Norrsken22, a growth-stage investor focused on Africa from Stockholm, Fluent Ventures and Proof VC, both growth-stage funds based in the United States, and pan-African early-stage investors CRE Venture Capital and Janngo Capital.

Why The Investors Invested

The informal trade sector constitutes a major portion of Africa’s $1 trillion retail market. This industry, which is largely fragmented, has witnessed innovation from various startups in recent years. These startups aim to connect informal retailers with manufacturers and large wholesalers through digital platforms, including apps and a network of logistics and distribution services.

During most of 2021 and early 2022, B2B e-commerce startups experienced significant growth, attracting substantial investments from both local and global investors. Many of these startups utilized the funds to implement growth strategies, such as providing incentives and discounts on products to onboard merchants. However, with the availability of free capital diminishing due to rising global interest rates, some B2B e-commerce startups have started reevaluating their growth strategies, cutting costs, and withdrawing from certain markets.

However, Sabi stands apart from the rest. According to sources familiar with the company’s operations, despite being in business for just two and a half years, the startup, operating in Nigeria, Kenya, and South Africa, has exhibited remarkable growth.

In late 2021, Anu Adasolum and Ademola Adesina, executives at Sabi, disclosed that the company had already amassed a network of over 175,000 merchants and achieved an annualized Gross Merchandise Value (GMV) run rate of $200 million. Since then, these figures have grown significantly, with the company now boasting over 300,000 merchants and an annualized GMV surpassing $1 billion, as confirmed by three individuals familiar with Sabi’s financials.

A Look at What Sabi Does

Sabi, operating in Nigeria, Kenya, and South Africa, provides digital commerce infrastructure to Africa’s informal economy. The startup acts as an intermediary, facilitating connections between manufacturers, distributors, wholesalers, and retailers (referred to as merchants). Sabi’s asset-light model utilizes offline agents, call centers, merchant partners, and supplier centers to engage with stakeholders in the B2B e-commerce retail chain. The company offers various tools for inventory management, sales, tracking, digital invoices, and analytics, enhancing the efficiency of the value chain.

Sabi’s primary revenue streams remain consistent, primarily through capturing a 5–6% take rate (depending on the category) from marketplace transactions. Additionally, the company earns a financing margin on credit-related transactions that it originates. Sabi has facilitated over $100 million on behalf of local microfinance banks and fintech lenders, highlighting its role in the financial ecosystem and potentially explaining the investment from CommerzVentures, a fintech-focused investor.

Sources indicate that Sabi is currently processing around 15,000 monthly orders and experiencing over 20% month-on-month growth. While this is a fraction of Wasoko’s monthly order volume from March last year, Sabi’s higher GMV suggests that it records higher average order values, primarily from wholesalers rather than retailers. To further capitalize on this, Sabi plans to launch new products and features aimed at its agents and last-mile merchants. These additions are expected to create additional revenue streams and strengthen the company’s focus on the B2B payments value chain.

Sabi, which caters to a broad range of product categories, including FMCG goods, agriculture, electronics, and chemicals, also has expansion plans. According to insiders, the company intends to enter new markets, including Tanzania and Malawi through acquisition, as well as the Democratic Republic of Congo (DRC) and Francophone West Africa.

Sabi

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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

Nigerian B2B Retail Startup Sabi Raises Additional Bridge Funding

May 10, 2022

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

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.

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.

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.

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

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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

Nigerian B2B Retail Platform, Sabi, Raises $6m Bridge Round

November 25, 2021

Sabi, a one-year-old retail plaform which is a spinoff from Rensource (an African energy firm that provides consumers with power-as-a-service) is the latest company to raise financing to serve the informal sector. The startup has closed a $6 million bridge deal led by CRE Ventures, a pan-African VC fund.

Sabi’s bridge investment comes a year after the company raised $2 million from CRE Ventures, Jaango Capital, Atlantica Ventures, and Waarde Capital in a seed round.

Sabi retail platform — *Anu Adasolum, CEO Sabi. Credit: Sabi*

Why The Investors Invested

Sabi’s monthly GMV figures are one of the reasons investors trooped in in this round. The company claims to be on the verge of processing $12 million in monthly GMV right now. While Jumia, Africa’s largest e-commerce company, achieves this amount on average after five years in operation, Sabi achieved it in less than a year, owing to the scale of the country’s informal B2B e-commerce retail industry. Also, more than 175,000 merchants use the category-agnostic platform, with B2B transactions totaling more than $200 million in annualized GMV run rate. On Sabi’s network, more than 10,000 agents service these merchants. The company is also growing on an average of 40% month on month in Nigeria.

The backgrounds of the founders also influenced the latest round to a great extent. Prior to joining Sabi and Rensource, CEO Adasolum worked at Jumia, where she was in charge of offline sales in Nigeria, Ghana, and Kenya.
She has also worked for the African e-commerce behemoth in commercial operations and merchant acquisition. Co-founder Adesina has extensive expertise dealing with international corporations, working with organisations, such as the Capricorn Investment Group, the Rockefeller Foundation, and JP Morgan.

“Sabi’s online and offline approach to serving informal businesses, combined with the quality of its platform and service provider curation, has clearly taken root in Nigeria. The company is on track to be one of the fastest-growing African companies of 2021 and is showing no signs of slowing down,” Pardon Makumbe, co-founder and managing partner of CRE Venture Capital said.

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.

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.

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 month, the company opened its doors in Kenya, and it has recently made a few hires in South Africa, with plans to go online early next year.

Sabi retail platform Sabi retail platform

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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 write