Africa-based B2B e-commerce firms are raising capital to drive expansion and business growth
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Across Africa, several innovative startups have emerged in the B2B e-commerce landscape over the last few years. With the sector ripe for disruption, these startups are digitizing informal trade across the region. Many of these startups have experienced high growth, and as a result, attracted the eyes of venture capital firms and private equity players. To drive their expansion and business growth, many of the B2B e-commerce firms in the African region are raising funding rounds. For instance,
- In March 2022, JABU, a South Africa-based B2B e-commerce firm, announced that the firm had raised US$15 million in its Series A round, which has been led by Tiger Global. Before this, the firm also raised US$3.2 million in its seed funding round in January 2022. Notably, the startups allow merchants to order, stock, and pay for products through the Jwallet. Furthermore, merchants also receive same-day delivery. As of January 2022, the startup was serving 6,000 merchants in three markets. These include Namibia, South Africa, and Zambia. The firm is planning to use the funding round to further deepen its reach in Southern Africa while expanding its presence in countries such as Eswatini and Botswana in 2022.
- In March 2022, Wasoka, another B2B e-commerce player in the African region, announced that the firm had raised US$125 million in its Series B funding round, which was led by Tiger Global and Avenir Growth. The firm enables informal retailers to restock groceries and everyday essentials using the B2B e-commerce platform. Like JABU, Wasoka is also planning to use the fresh capital to further expand its geographical presence in the African market and to drive its product growth. Currently, the firm is exploring opportunities to launch its presence in the Nigerian and Southern African markets. Furthermore, it is also planning to use the funding for strengthening its position in the six African countries, where it operates.
Currently, the firm is operating in Kenya, Tanzania, Rwanda, Uganda, Côte d’Ivoire, and Senegal. With a network of 50,000 informal retailers across these countries, the firm has recorded revenue growth of 500% over the last 12 months, leading to March 2022. Through strategic investments and mergers and acquisition deals, the startup is also exploring opportunities to diversify into other business verticals such as social commerce.
While B2B e-commerce is gaining rapid momentum across the African region, Egypt is one of those countries where a number of different startups are operating in the space and raising funding rounds. For instance,
- In September 2022, Mazaya, a B2B e-commerce startup from Egypt, announced that the firm had raised US$5 million in its pre-seed funding round, which was led by Raya Trade and Distribution. Notably, the B2B marketplace is focused on electronics and has over 15,000 SKUs. Since its inception, the startup has delivered more than 30,000 orders for over 6,000 retailers in Egypt. With the fresh capital, the firm is planning to expand into new markets and scale its operations to further drive growth in its business.
- In July 2022, Cartona, another B2B-focused e-commerce startup, announced that the firm had raised US$12 million, as it seeks to expand and scale its business into new verticals. Notably, the Egyptian startup is one of the leading players digitizing the traditional trade market. The startup is working with over 60,000 merchants and has processed more than 1 million transactions with an annualized GMV of approximately US$120 million. With a network of 1,500 wholesalers and distributors, the firm is now seeking to expand into new FMCG verticals.
- In May 2022, Teegara, another Eygpt-based B2B e-commerce platform, announced that the firm had raised a funding round. While the firm did not disclose the amount raised, it announced that the investment was led by the Alexandria Business Angels Network.
With the informal retail market expected to be a multi-billion opportunity, many startups in the region are looking to capitalize on the market potential. Apart from all of these startups, many more players have bagged investments from venture capital firms. For instance,
- In February 2022, MarketForce, the B2B e-commerce firm in Kenya, announced that the firm had raised US$40 million in its Series A round. Copia, another Kenyan firm, announced that it had secured US$50 million under its Series C round. ProXalys, the Senegal-based firm, announced that it had raised US$150,000 in the pre-seed round.
As the B2B e-commerce market continues to record strong growth in Africa over the next three to four years, PayNXT360 expects more venture capital and private equity money to flow into the innovative startups from the short to medium-term perspective. Furthermore, PayNXT360 expects mergers and acquisition activities to heat up in the region over the next few years, as players with strong balance sheets and funding look to diversify their services and continue to expand their geographical footprint across the region.