ImpactAlpha, July 27 – Informal retail is a major hub of economic activity on the African continent. Current and concrete data is hard to come by, but one estimate in Kenya pegs informal economic activity at 34% of GDP and 77% of employment.
Nairobi-based startup Sokowatch raised $2 million for its platform that pairs informal retail vendors in Africa to large consumer goods suppliers like Unilever and Proctor and Gamble as well as local companies. Its aim is to reduce the cost of goods for retailers and their customers by cutting out costly middlemen and handling payments and delivery. The company claims it cuts costs to buyers by 20%.
Sokowatch has managed more than 100,000 orders for several thousand customers, TechCrunch reports. It’s currently operating in Kenya and Tanzania and plans to expand to other East African markets.
Sokowatch’s seed round was backed by 4DX Ventures, Village Global, Lynett Capital, Golden Palm Investments, and Outlierz Ventures. Other companies like Twiga Foods, also in Kenya, and Doodhwala in India have built businesses around driving efficiency in informal markets. Twiga, which connects informal shop owners to farmers, has reportedly been in the process of raising new equity funding, following a $10.3 million round last year.