Nairobi startup Sokowatch, which has been developing business-to-business (B2B) e-commerce supply chains for retailers in East Africa’s informal markets, has confirmed it has closed a $14 million Series A funding round which it hopes to use to expand.
But SEC filings show it has received up to $18 million in equity.
Sokowatch works with large with large FMCG suppliers including Unilever and Procter & Gamble. The informal retailers can order their goods from Sokowatch’s online platform by SMS, phone or mobile app and the goods are delivered to the retailers by its fleet of three-wheeled tuktuks.
As well as enabling logistics and supply chains for informal retailers, Sokowatch has also been building a notable credit facility business for its customers via its mobile platform to help them expand their businesses.
The funding round is led by Quona Capital, a VC firm which specializes in fintech firms in emerging markets, Amplo, a global VC which has backed Andela and Robinhood and Breyer Capital, which has backed Ghana’s mPharma.
Sokowatch raised $2.5 million in additional seed funding from new and existing investors a year ago on top of $2 million a year earlier. As well as Kenya it delivers orders to thousands of retailers in Tanzania, Uganda and Rwanda.
The company estimates there are 10 million informal retailers and as a $600 billiion opportunity in Sub Saharan Africa. It looks to the B2B operations of Alibaba in China and Udaan in India as evidence of what’s possible.
While discussions around e-commerce in Africa have been dominated by Jumia, especially in the run-up to its initial public offering last April, Sokowatch has not been alone in trying to take a different approach to online retail on the continent. In November, Copia Global raised $26 million from investors to focus on catering to low-income consumers who are underserved partly by virtue of living mainly outside urban areas. It uses a 5,000-strong agent network of local shopkeepers who earn commissions as “points of aggregation”.
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