Startups

Sokowatch, now Wasoko, rises to a $625 million valuation with its $125 million Series B raise

Sokowatch rises to a $645 million valuation with its $125 million Series B raise - Startup Lagos

Retail trade in Africa

With informal retail driving the eCommerce trend across the continent and constituting over 67% of total retail across Kenya, Nigeria, and South Africa, there are boundless opportunities for the retail sector. As research shows, over $600 billion of consumer goods are sold in Africa through informal retail channels annually. Even in spite of this weighty relevance, and the bulk of funding coming into the sector, the sector is still highly fragmented, with quite a number of challenges in lack of access to financing, logistics challenges, etc. Also, with a bulk of all this trade happening between unregistered or unlicensed retailers, a good deal of retail trade on the continent is not captured enough. However, the companies operating at this level of trade are closest to the market, serving the last mile. These sales to the Bottom-of-the-Pyramid (BOP) consumers, who earn less than $2,500 annually, typically represent a majority of trade within sub-Saharan Africa.

Sokowatch to Wasoko: Rebranding with its $125 million Series B raise

Sokowatch, one of Africa’s foremost e-commerce companies, utilizing innovative technology in solving the challenges along the informal retail supply chain, has just announced its $125 million Series B equity round. This funding stands as the largest investment to be ever raised by an African startup, from a sector outside fintech. The round was led by Tiger Global, supported by Avenir Growth Capital, with participation from VNV Global, Binny Bansal (Co-Founder of Flipkart), and Sujeet Kumar (Co-Founder of Udaan), as well as Quona Capital, 4DX Ventures, and JAM Fund. This new funding, according to Techcrunch, takes the company to about $625 million valuation. The company’s last raise was in 2020, where it had secured a $14 million Series A funding, backed by Quona Capital.

Sokowatch had earlier raised a Series A in 2020 of $14 million, backed by Quona Capital. Source: Yahoo, 2021.
Sokowatch had earlier raised a Series A in 2020 of $14 million, backed by Quona Capital. Source: Yahoo, 2021.

With the impetus of these funds, Sokowatch has also officially expanded to Abidjan, Côte d’Ivoire, and Dakar, Senegal, its first footprints in West Africa. The retail startup aims at revolutionizing access to consumer goods across Africa’s $600 billion value informal retail sector. The company is also rebranding to Wasoko, which means “People of the Market” in Swahili. This new brand pivot helps to consolidate the company’s positioning as a public brand providing delivery of essential goods and working capital financing to informal retailers across the continent.

To date, Wasoko has delivered over 2.5 million orders to 50,000 informal retailers across Kenya, Tanzania, Rwanda, Uganda, Côte d’Ivoire, and Senegal with revenue growth over the past 12 months of over 500% and at over 1,000% since 2019. Wasoko has grown to over 800 full-time employees across its various geographies. The company has made its employees shareholders through Wasoko’s universal employee equity policy. 

The new capital will enable Wasoko to drive further geographic expansion and product growth across the continent. The company is exploring expansion into Nigeria and Southern Africa while continuing to consolidate its market-leading position across its six current countries. Wasoko is also examining opportunities to expand its product offering to verticals such as merchant point-of-sale systems, bill payments, and social commerce through both internal innovation as well as strategic investments and acquisitions of relevant companies.

As Daniel Yu, CEO and Founder of Wasoko, points out,

“After more than six years building and constantly iterating on our operations, we are proud to have demonstrated the traction and quality of business required to raise funding from world-class investors. We’re fully focused on leveraging their strategic support to build one of the biggest e-commerce companies in the world and transform access to goods and services for African citizens across every corner of the continent.” 

Wasoko is solving a bulk of challenges in the informal retail sector, through the ease with which products can be ordered on the platform via SMS or mobile app for free same-day delivery to their customers’ stores. Through its growing vast network, the company also provides inventory financing, through access to Buy Now Pay Later financing. Its overarching goal is to help informal retailers enjoy the ease of running their businesses and serving the expanding consumer base in Africa.

Andrew Sugrue, who is Founding Partner at Avenir Growth Capital, says further,

“Informal retailers capture the vast majority of consumer spend in Africa, and they are dramatically underserved by existing distribution and financial infrastructure. 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 through a combination of superior product selection, logistics, and financial services.”

The company has also appointed Sujeet Kumar, Co-Founder of Udaan, a globally prominent eCommerce platform, to its Board of Directors to distill his vast experience in offering strategic guidance to stimulate the company’s growth.

At the back of this new funding, the company has appointed to senior leadership key personnel, such as Mellany Msengezi (ex Airtel) as Head of Marketing; Aurelien Barreau (ex Carrefour) as Head of Sourcing; and Georges Bejjani (ex Jumia) as Head of Business Intelligence. Wasoko is also keen on hiring across various levels to greatly increase the expertise and resourcefulness of its team across the different market geographies where they operate.

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