Sokowatch, a Nairobi-based B2B company that connects informal retailers to manufacturers, has raised $125 million in a Series B round and rebranded to Wasoko.
The company also announced that it has expanded to Senegal and Côte d’Ivoire, its first markets outside east Africa, with founder and global CEO Daniel Yu saying they looked for markets that are similar to their existing countries of operation in east Africa—Kenya, Tanzania, Rwanda, and Uganda—to expand to.
“For us with this model, where we’ve executed quite well across multiple medium-sized countries, this suited us quite well,” he told Quartz.
Wasoko will use the capital to expand further geographically and drive product growth across the continent. The company is looking to expand into Nigeria and southern Africa and to increase its product offering to merchant point-of-sales systems, bill payments, social commerce, and other verticals.
The funding was in equity and the round was led by Tiger Global and Avenir Growth Capital, with participation from VNV Global, Binny Bansal, Sujeet Kumar, Quona Capital, 4DX Ventures, JAM Fund, and others.
“We’re excited about the category-defining, Pan-African commerce platform Wasoko is building and the efficiencies it brings to these retailers and their suppliers,” Andrew Sugrue, founding partner at Avenir Growth Capital, said in the announcement.
The B2B market in Africa is booming
Africa’s B2B market for informal retailers is growing fast. Wasoko’s announcement comes after two similar big moves last month when Nigeria’s TradeDepot bought Ghana’s Green Lion and Kenya’s Marketforce announced raising $40 million in a Series A round.
Wasoko and other B2B companies for informal retailers replace conventional suppliers and wholesalers and digitize the distribution process. They partner with manufacturers and store products in distribution hubs that they manage and that are digitally connected to corner shops. Shop owners use their phones to make orders and company agents fulfill them.
This model helps shopkeepers easily source goods and manufacturers to ensure that their products are consistently available to consumers. The B2B companies are also able to use data to offer the retailers credit.
Since its launch in 2016, Wasoko has created a network of more than 50,000 informal retailers across 18 operating cities and has completed more than 2.4 million orders.
Senegal and Côte d’Ivoire score very highly (93 and 95) with regard to being low market saturation environments but score very low (38 and 24) with regard to being low risk environments for companies interested in retail (100 is the best score indicating low risk and low saturation). This is according to a global index that tracks retail sales in emerging markets.
Yu, the founder and global CEO, reckons that a number of factors that are similar in west and east Africa will help the company replicate this success in west Africa. These include Senegal and Côte d’Ivoire being in a customs union—the West African Economic and Monetary Union—and the countries having regional structures where they oversee many countries out of a single office, usually in Abidjan or Dakar.
The name change is linked to the pan-African expansion, Yu said. As the company started entering west African and francophone markets, they realized “’Sokowatch’ is a very kind of funny and strange sounding phrase,” he says, so they decided “to come up with a simpler name that will be easy to pronounce and spell across markets, but something that still reflects our east African roots.”
“Wasoko” means “people of the market” in Swahili.
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