Kenya stationed B2B e-commerce startup Sokowatch has raised $14 million in Series A funding toward its mission of revamping supply-chain sectors for Africa’s informal retailers.
From Nairobi, the company has developed a platform that connects merchants directly to local and multinational suppliers — similar to Unilever and Proctor and Gamble — and digitizes orders, payments, and delivery-logistics.
Since starting in 2016, and raising a $2 million seed round two years ago, Sokowatch has grown within Kenya and into Rwanda, Tanzania, and Uganda.
With its Series A, the startup plans to widen its client services — from working-capital to data-analytics — and target new African markets, in line with CEO Daniel Yu.
Sokowatch doesn’t rule out using its infrastructure to enter someday business-to-consumer (B2C)online retail.
For a moment, the startup’s primary business focus is to cut costs and increase revenue margins for small merchants.
Informal retail is still a leader in Africa — even with the rise of shopping malls and well-funded e-commerce ventures, corresponding to Jumia.
The dimensions and potential of the continent’s informal retail industry has captured the eye of economists and startups. GDP revisions in a number of African nations have revealed outdated statistical methods had been missing billions of dollars in financial activity. One estimate by The International Labor Organization places over two-thirds of Sub-Saharan Africa’s non-agricultural employment in the informal economy.
On the number of shops in that field, a 2016 study by global consultancy PwC predicted 90% of sales in Africa’s leading economies come by informal channels, similar to markets and kiosks.