Sokowatch is taking its B2B model to Cote d’Ivoire and Senegal

Sokowatch, a Nairobi-based B2B company that connects informal retailers to manufacturers, has raised $125 million in a Series B round and rebranded to Wasoko. The company also announced that it has expanded to Senegal and Côte d’Ivoire, its first markets outside east Africa, with founder and global CEO Daniel Yu saying they looked for markets that are similar to their existing countries of operation in east Africa — Kenya, Tanzania, Rwanda, and Uganda — to expand to.

“For us with this model, where we’ve executed quite well across multiple medium-sized countries, this suited us quite well,” he told Quartz.

Wasoko will use the capital to expand further geographically and drive product growth across the continent. The company is looking to expand into Nigeria and southern Africa and to increase its product offering to merchant point-of-sales systems, bill payments, social commerce, and other verticals.

The funding was in equity and the round was led by Tiger Global and Avenir Growth Capital, with participation from VNV Global, Binny Bansal, Sujeet Kumar, Quona Capital, 4DX Ventures, JAM Fund, and others.

“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,” Andrew Sugrue, founding partner at Avenir Growth Capital, said in the announcement.

The B2B market in Africa is booming

Africa’s B2B market for informal retailers is growing fast. Wasoko’s announcement comes after two similar big moves last month when Nigeria’s TradeDepot bought Ghana’s Green Lion and Kenya’s Marketforce announced raising $40 million in a Series A round.

Wasoko and other companies in the same space make it possible for corner shops to order stock for their businesses online from manufacturers. This model has high-potential because at least 90% of sales in many parts of Africa happen informally through avenues including markets, convenience stores, and street hawkers.

Since its launch in 2016, Sokowatch has created a network of more than 50,000 informal retailers across 18 operating cities and has completed more than 2.4 million orders.

Senegal and Côte d’Ivoire score very highly (93 and 95) with regard to being low market saturation environments but score very low (38 and 24) with regard to being low risk environments for companies interested in retail (100 is the best score indicating low risk and low saturation). This is according to a global index that tracks retail sales in emerging markets.

Yu, the founder and global CEO, reckons that a number of factors that are similar in west and east Africa will help the company replicate this success in west Africa. These include Senegal and Côte d’Ivoire  being in a customs union — the West African Economic and Monetary Unionand the countries having regional structures where they oversee many countries out of a single office, usually in Abidjan or Dakar.

The name change is linked to the pan-African expansion, Yu said. As the company started entering west African and francophone markets, they realized “’Sokowatch’ is a very kind of funny and strange sounding phrase,” he says, so they decided “to come up with a simpler name that will be easy to pronounce and spell across markets, but something that still reflects our east African roots.”

“Wasoko” means “people of the market” in Swahili.

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