Sokowatch a B2B e-commerce platform connecting African retail stores with multinational companies such as Unilever and Procter & Gamble, announced today the close of a $2 million seed round led by 4DX Ventures.
They are joined in this round by San Francisco-based venture capital firm, Village Global (limited partners include Jeff Bezos, Bill Gates and Diane Greene), Lynett Capital, and other Africa-focused venture funds including Golden Palm Investments and Outlierz Ventures.
Early investors Impact Engine and Chandaria Industries, East Africa’s largest hygiene products manufacturer, also followed on with additional investment. Sokowatch’s mission is to empower the informal retail sector to join the digital economy. Launched in Nairobi in 2016, Sokowatch allows storeowners to order fast-moving consumer goods at any time through SMS or mobile app for same-day delivery. Sokowatch has already delivered over 100,000 orders to customers, and has been growing rapidly.
This demonstrates the demand for their inclusive technology, which increases the availability of goods while dramatically reducing the time and cost of procuring products for storeowners in Africa.
Sokowatch currently supplies thousands of retailers in Kenya and Tanzania with free same-day delivery of products from both multinational consumer goods companies and local manufacturers. Sokowatch also offers customized lines of credit to retailers, and plans to rollout additional complementary financial services in the future based on its proprietary customer data.
Storeowners using Sokowatch’s platform are able to save on transport costs and minimize lost sales, which can account for up to 20% of business costs. A significant component of Sokowatch’s success has been leveraging the insights of their team, many of whom come from the neighborhoods they serve. “Our operations manager David Marika previously worked in field marketing for P&G, and recruited all of our first drivers. Our entire team, including our software developers, is based in East Africa, which is essential to creating the most effective solutions for storeowners in the communities we serve,” says Daniel Yu, Sokowatch founder and CEO.
Informal retailers are a critical part of local communities, where stores also serve as social centers fortheir neighborhoods. “With over 90% of retail sales across Africa happening through informal retailers,we believe that there is a huge opportunity to formalize small businesses,” says Daniel Yu, CEO and Founder of Sokowatch. “Because the African continent has a median age of only 19 but is already the world’s second largest population, we expect new tech-enabled solutions to leapfrog the traditional models of malls, banks, and delivery companies when it comes to providing retail, finance, and logistics services for the African mass market,” added Yu.
Given the fragmentation of the retail sector in Africa, multinational FMCG companies struggle with distribution and visibility on where their products end up. “We help manufacturers increase their sales and can tell them exactly where their goods are going, and how long they are on the shelves,” added Yu. Unilever Customer Development Director Moses Bamidele agreed, saying “Sokowatch is one of the good tools of technology that will help drive costs down significantly.” Unilever CEO Paul Polman visited Sokowatch’s Nairobi operations in December 2017.
Sokowatch will use its investment proceeds to further expand its customer base across East Africa while also piloting additional value-added services for shops. “With over 10 million informal retailers stores across urban Africa alone, we are excited for the work ahead of us”, concluded Yu.