Frontier and Growth Markets | March 17, 2022

Sokowatch nabs $125 million for economic inclusion for Africa’s informal retailers

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, March 17 – ImpactAlpha has been watching closely the move into micro and small-business financing by enterprise tech providers in emerging markets. Among the earliest: Nairobi-based Sokowatch, which now supports 50,000 informal retailers with online inventory, logistics and sales management.

The company’s $125 million Series B round, led by Tiger Global and Avenir Growth, is among the largest-ever fundings focused on Africa’s informal sector.

Existing investors Quona Capital, 4DX Ventures and JAM Fund re-upped in the round.

Buying power

Sokowatch offers customers small lines of credit off of its own balance sheet. Aggregating retailers buying power helps shopkeepers meet “unmet demand from the community to buy goods,” founder Daniel Yu told ImpactAlpha last year.

Along with the funding announcement, Sokowatch is rebranding itself as Wasoko, or “People of the Market” in Swahili, and expanding in Kenya, Rwanda, Tanzania, Uganda, Côte d’Ivoire and Senegal.

Informal opportunity

Investor appetite for companies digitalizing the sector has surged since the start of the pandemic, and round sizes and valuations are now climbing.

“Informal retailers capture the vast majority of consumer spend in Africa, and they are dramatically underserved by existing distribution and financial infrastructure,” said Avenir’s Andrew Sugrue.

In December, Nigeria-based enterprise tech provider TradeDepot raised $110 million in debt and equity. Kenya-based MarketForce raised $40 million last month.