KENYA – Sote, a supply chain-focused company, has raised a US$4 million seed extension round to expand its offering into the fintech space.
The round, which brings its total funds raised to date to US$8.4 million, was led by Social Capital, Chamath Palihapitiya’s fund, with the firm’s growth partner Ray Ko joining Sote’s board.
It also included a small group of investors including Justin Saslow, Harry Hurst of Pipe, MaC Venture Capital, and K50 Ventures.
Sote now plans advancements into the fintech space, aiming to add to its end-to-end logistics freight forwarding service a full-service working capital loan solution for Africa’s end-to-end supply chain. Meanwhile, it has added to its team Samora Kariuki, as director of fintech, and John Bish, as CFO and M&A lead.
“Sote has always been about the people. A group of passionate individuals driven to build the future of Africa,” said Felix Orwa, founder and CEO of Sote.
Founded in 2018, Sote launched its licensed tech-enabled customs clearing and forwarding service in 2020. The platform provides a real-time dashboard that allows manufacturers, retailers, and distributors visibility on shipment status, saving time and money.
“If the supply chain is composed of the flow of product, the flow of information, and the flow of cash, then Sote already controls the first two,” Felix added.
“With the launch of our fintech solution, we will have control and positive influence on all three. This creates a powerful flywheel effect with our customers as they find more holistic and convenient bundled services between logistics and capital solutions.”
The startup grew its customer base by 370 per cent in the last year, and also saw revenue growth of 200 per cent. Having recently secured its Authorised Economic Operator (AEO) certification, Sote now aims to target larger customers in 2022 and exceed growth targets.
The African supply chain has been disrupted due to the ongoing COVID-19 crisis. With American supply chains in disruption, African companies can’t receive products that were manufactured in the United States — products, according to The Washington Post, that they use in the manufacture of their own wares.
So, in response, many African countries are turning their supply chains inward — that is, increasing domestic manufacture, which in turn could make the goods cheaper for the consumer to purchase.