Wasoko (formerly known as Sokowatch), an e-commerce company that offers tech-enabled supply chain solutions to Africa’s informal retailers has raised $125 million in a Series B equity round.
The round which was led by Tiger Global and Avenir Growth Capital. The round comes 2 years after Wasoko closed a $14 million Series A and also saw participation from VNV Global; Binny Bansal, co-founder of Flipkart; and Sujeet Kumar, co-founder of Udaan; Quona Capital; 4DX Ventures; and JAM Fund.
Wasoko’s latest round raise is the second-largest venture financing round ever secured by a non-fintech startup in Africa and the largest in the B2B retail e-commerce space, where a host of players like TradeDepot, MarketForce, Omnibiz, Alerzo, and others ply their trade.
This new fund raised has placed the company’s valuation to $625 million. This also, comes with its launch into Abidjan (Côte d’Ivoire) and Dakar (Senegal) – its first locations in West Africa.
Wasoko which means “People of the Market” was initially launched in Kenya as Sokowatch by its found and CEO, Daniel You in 2015.
Following its launch, it has scaled into 3 East African markets – Tanzania, Rwanda, and Uganda in 2018. Also, with the new expansion into Dakar and Abidjan, it brings its market expansion to 6.
Wasoko stated that its new rebranding is a “shift from its origins as a backend distribution software platform in East Africa to a public brand providing free delivery of essential goods and working capital financing to informal retailers across opposite ends of the African continent”.
The new capital will enable Wasoko to drive further geographic expansion and product growth across the continent, according to the company.
The company said it 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.
The African continent accounts for more than the sales of $600 billion sold consumer goods through its informal retail channels annual.
These channels supplies a vast majority of its 1.2 billion population. Irrespective of its vitality, the channels of distribution for the informal retail sector seems highly fragmented and inefficient with local shops facing a number of major challenges including frequent stockouts, limited access to capital, and difficulty receiving goods from suppliers.
The Wasoko’s platform offers informal retailers the ability to order products at any time either via SMS or the mobile app for free same-day delivery to their stores. Also, utilising on its purchasing data, the platform also evaluates retailers to provide them with access to Buy Now Pay Later (BNPL) financing.
Speaking on reasons for investing, Andrew Sugrue, Founding Partner at Avenir Growth Capital said, “Informal retailers capture the vast majority of consumer spending in Africa, and they are dramatically underserved by existing distribution and financial infrastructure”.
“We’re excited about what Wasoko is building and the efficiencies it brings to these retailers and their suppliers”, Sugrue added.
After its launch, Wasoko has claims to have delivered 2.5 million orders to over 50,000 informal retailers across Kenya, Tanzania, Rwanda, Uganda, Côte d’Ivoire, and Senegal with revenue growth over the past 12 months at over 500%.
It currently has more than 800 full-time employees across Africa.
Speaking on the need to expand into the francophone West African markets instead of Nigeria, which is arguably the largest market for informal retail in Africa, Yu said that the choice reflects the strong growth that its choice countries have exhibited in the region overall.
“If you look at the past 10 years, both Senegal and Cote d’Ivoire have experienced solid year-on-year GDP growth,” Yu said.
Wasoko also added in a statement that it is exploring expansion into Southern Africa and Nigeria nonetheless while continuing to consolidate its position across its six current countries.
In addition to the fundraising and rebranding, Wasoko has made several appointments to its senior leadership team