Sabi, a Lagos-based B2B e-commerce startup that offers digital commerce infrastructure to Africa’s informal economy, has secured $38 million in Series B funding, with a valuation of $300 million, as reported by reliable sources. This investment reflects a renewed interest from investors in the B2B e-commerce market, which is currently undergoing some challenges.
The funding round attracted a range of notable investors, including CommerzVentures, a specialist fintech investor based in Frankfurt; Norrsken22, a Stockholm-based growth-stage investor with a focus on Africa; Fluent Ventures and Proof VC, both U.S.-based growth-stage funds; and pan-African early-stage investors CRE Venture Capital and Janngo Capital.
While Sabi has declined to comment on the matter, it’s important to note that the company operates within the informal trade sector, which constitutes a significant portion of Africa’s $1 trillion retail market. This industry, characterized by fragmentation, has seen the emergence of various startups aiming to connect informal retailers with manufacturers and large wholesalers through digital platforms like apps, along with logistics and distribution services.
Throughout most of 2021 and early 2022, B2B e-commerce startups experienced a prosperous period, attracting substantial investments from local and global investors. Many of these funds were utilized to drive growth strategies, such as offering incentives and discounts on products to entice early merchant adoption. However, it is important to recognize that such strategies can lead to a race to the bottom. As global interest rates rise and access to free capital diminishes, some B2B e-commerce startups are reassessing their growth tactics, cutting costs, and selectively withdrawing from specific markets to adapt to the changing landscape.
One notable aspect of Sabi’s operational model is its ability to effectively target and engage with a wide range of customers, which contributes to its success in generating substantial merchandise numbers.
As a B2B e-commerce startup focusing on Africa’s informal economy, Sabi understands the unique needs and challenges faced by informal retailers, manufacturers, and large wholesalers in the region. By providing digital commerce infrastructure specifically tailored to this sector, Sabi enables seamless connections between these stakeholders through its platform.
Sabi’s platform serves as a bridge, facilitating transactions and interactions between informal retailers and their suppliers. By leveraging digital platforms such as apps, Sabi streamlines the ordering, procurement, and delivery processes, making it easier for informal retailers to access a wide variety of products from manufacturers and wholesalers.
This targeted approach allows Sabi to tap into the vast potential of the informal trade sector, which represents a significant portion of Africa’s retail market. By providing a user-friendly and efficient platform, Sabi empowers informal retailers to access a broader range of merchandise and suppliers, contributing to increased merchandise numbers and overall business growth.
Furthermore, Sabi’s network of logistics and distribution services complements its platform, ensuring that products are delivered efficiently and reliably to the retailers. This end-to-end solution enhances the value proposition for both suppliers and informal retailers, making Sabi an attractive choice for all parties involved.
Through its customer-centric operational model, Sabi capitalizes on the unique characteristics of Africa’s informal economy and effectively caters to the needs of its target customers. This approach allows Sabi to achieve higher merchandise numbers, drive growth, and establish itself as a key player in the B2B e-commerce market within Africa’s informal sector.
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