KENYA – Sokowatch, a B2B e-commerce startup, has raised US$14 million in Series A funding toward its mission of revamping supply-chain markets for Africa’s informal retailers.
The company has created a platform that connects merchants directly to local and multinational suppliers — such as Unilever and Proctor and Gamble — and digitizes orders, payments and delivery-logistics.
Since launching in 2016, and raising a US$2 million seed round in 2018, Sokowatch has expanded within Kenya and into Rwanda, Tanzania and Uganda.
With its Series A, the startup plans to broaden its client services — from working-capital to data-analytics — and target new African markets, according to CEO Daniel Yu.
“We’re looking to build out the largest B2B e-commerce network across Africa.”
A 2016 study by global consultancy PwC estimated 90% of sales in Africa’s major economies come through informal channels, such as markets and kiosks.
Speaking to TechCrunch, Daniel Yu said that Sokowatch is shifting that scenario and now serves over 15,000 small retailers across its operating areas.
“We…estimate that we save merchants at least 20% on supply-chain costs for the goods we supply,” said Yu.
Sokowatch’s AppSokowatch offers retailers an app to order products from its partner suppliers and maintains a fleet of vehicles, primarily three-wheel tuk tuks, for delivery.
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 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.
Quona Capital led Sokowatch’s US$14 million Series A round, joined by Amplo, Breyer Capital, Vertex Ventures, Timon Capital and repeat investor 4DX Ventures.
Sokowatch Tuk TukThe startup joins other B2B oriented ventures that have drawn significant capital over the last 12 months.
Sokowatch wouldn’t name which countries in Sub-Saharan Africa it’s eyeing for expansion. The company’s CEO did confirm the startup could someday use the advantages of its platform to offer 3PL services or sell online directly to consumers in Africa.
“It’s within the power of our networks to do so” said Yu. “At the end of the day, we want to be the channel — both digital as well as physical — for transforming access to goods and services for these communities.”
