Last mile distributor JABU raises US$15m in Series A round to expand into new markets

NAMIBIA – JABU, a last-mile distribution e-commerce firm based in Namibia, has raised US$15 million in a Series A round led by Tiger Global.

Tiger Global’s second investment in the B2B e-commerce industry comes after backing Wasoko in its mammoth Series B round, which was completed in March.

It’s also worth mentioning that this transaction took place before Tiger Global’s US$17 billion loss during this year’s tech sell-off.

Box Group, Knollwood, and D Global Ventures are among the other investors in this growth round. Afore Capital, Oldslip, and FJ Labs were among the seed round funders who doubled down.

Jabu’s chief executive David Akinin said this funding will see Jabu deepening its presence in southern Africa, and expanding to new markets like Botswana and Eswatini later this year.

Akinin said what differentiates his start-up from others is how it is creating a much broader ecosystem for small businesses, rather than just a marketplace.

“Many businesses like ours are taking money out of the market. We’re trying to build a business that brings products into the market and continues in a journey that has a multiplier effect of moving that money 20 times around that market,” he said.

For many years, merchants who own small to medium-sized kiosks and shops across Africa have dealt with logistics issues when ordering their products from wholesalers and distributors.

Start-ups like Jabu and several others such as Wasoko, TradeDepot, Omnibiz, MarketForce, MaxAB and Chari have made this process easier via apps and more efficient distribution channels.

According to the company, drivers who handle distribution for its 232 logistics partners and use the wallet for payments can access asset finance and, for merchants: stock financing.

More on the latter, Akinin said he’s betting that the wallet system can provide a more sustainable alternative to the popular Book Now Pay Later (BNPL) model that other platforms are offering to merchants.

“I think buy now, pay later is an optical illusion. I think there is credit, and there are cash sales, and there’s nothing in between,” he said.

“So, I think it [BNPL] is going to worsen the situation for small businesses, it’s going to create more defaults, generate a culture of bad pay, and it’s going to create real debt at the SME level in Africa, that will be hard to justify.”

Start-Up Namibia’s Jesaya Hano-Oshike said his team was also advocating that Namibian start-ups be considered for funding on an international platform.

“Namibia is not considered a legitimate destination for start-up funding, but we are working hard to change that narrative. In general, capital is available, what is missing is early stage risk capital to take a business from 0 to 1. In other words, from having a prototype to being able to enter the market,” he said.

Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals, and insights from Africa’s business, economy, and more. SUBSCRIBE HERE

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.