Kenya-Based B2B eCommerce Startup Sokowatch Raises USD 14 Mn Series A, Eyes Expansion
The Kenya-based B2B e-commerce startup known as Sokowatch, which connects informal retailers directly to local and multinational suppliers, has raised USD 14 Mn in a Series A round.
The funding round was led by Quona Capital, with Vertex Ventures, 4DX Ventures, Timon Capital, Amplo, and Breyer Capital, also participating in Sokowatch’s USD 14 Mn round which follows a USD 2 Mn seed round recorded in 2018.
With this investment, the startup has joined what could be considered a growing list of African B2B commerce and logistics startups that have roped in significant funds in the last six months.
Since August 2019, Nigeria’s Kobo360, and a trio of Kenya-based startups including Lori Systems, Twiga, and Sendy have raised no less than USD 100 Mn between them while eyeing westward expansion on the African continent.
According to Sokowatch’s CEO, Daniel Yu, the Series A raise will enable the startup to expand its client services from working-capital to data-analytics, as well as boost the platform’s expansion into new African markets.
From its base in Nairobi where it first launched in 2016, Sokowatch has created a digital platform that connects merchants directly to local and multinational suppliers — including big names like P&G and Unilever. The digital platform orders, payments, and delivery-logistics.
Having started out in Kenya, Sokowatch has gone on to spread its tentacles to other countries in the East African region including Uganda, Rwanda, and Tanzania.
Sokowatch offers retailers an app to order products from its partner suppliers and maintains a fleet of vehicles, primarily three-wheelers also known as “tuk-tuks”, for delivery.
“We handle all of our last-mile logistics exclusively ourselves,” Yu told TechCrunch.
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 to inventory and overall sales,” said Yu.
The data analytics Sokowatch creates for clients is also opening up working-capital solutions.
“We’ve been able to use that data to offer in-kind credit lines to many shops that can’t gain it from banks,” said Yu.
In the CEO’s view, too many local merchants in Africa are sacrificing capital and incurring opportunity costs due to an inefficient supply chain.
Sokowatch is looking to change the narrative, according to its CEO, and the startup now serves over 15,000 small retailers across its operating areas while claiming to save merchants up to 20 percent on supply-chain costs.
While Sokowatch remains tight-lipped over which Sub-Saharan African countries it is considering for expansion at this time, the CEO did hint at using the advantages of its platform to offer third-party logistics services or selling directly to online consumers in Africa someday.