Nigeria’s informal trade sector, worth over Sabi — a spinoff from Rensource, an African energy company that offers power-as-a-service to customers — is the latest startup to raise funds to serve the informal sector. The company confirmed to TechCrunch that it has raised a \)"> 6 million bridge round led by pan-African VC firm CRE Venture Capital.
Sabi’s bridge round is coming a year after closing aAdemola Adesina and Anu Adasolum have been at the helm of Rensource since the company started in 2015; Adesina as founder and CEO and Adasolum, COO.
By providing these small and medium businesses with power, the team at Rensource began to look into other pain points these SMEs had and find ways to add value beyond energy provision.
With the pandemic halting Rensource’s business, the team had time to develop this concept which became Sabi in October 2020.
Adasolum leads Sabi’s efforts as founder and CEO following the company’s branch out in March, while Adesina holds a co-founder and director role.
Sabi is an attempt at platforming the informal sector and African trade via various online and offline channels. This means that Sabi tries to complement the middlemen (mainly distributors) in the B2B e-commerce retail chain rather than replace them, a model familiar with other prominent B2B e-commerce retail startups such as Sokowatch, MaxAB TradeDepot and Twiga.
“We’re not trying to be, you know, a tech-enabled digital distributor. We’re not trying to disintermediate a market full of hyper-specialization where one of the defining characteristics of the informal sector is you have all these middlemen and agents performing a very narrow role,” Adesina said to TechCrunch.
“We think that specialization is important for the sector to work properly — whether it’s aggregation, making a sale, knowing the customer especially well, all these middlemen play a key role. And the way we deal with them is we give them a set of tools and an infrastructure they can run their business on to make it more optimized.”
Sabi caters to the needs of manufacturers, distributors, wholesalers and retailers and classifies all of them as merchants.
The company operates an asset-light model and doesn’t own vehicles, warehouses or goods. But it provides visibility into these assets across the entire value chain from the demand and supply side and controls on a single platform.
Running this model exempts Sabi from the constraints a typical B2B e-commerce retail platform might face when acting as a distributor for manufacturers to retailers.
Anu Adasolum (Founder and CEO, Sabi)
For instance, asset-heavy platforms can’t move goods from two different suppliers in the same truck or use the same salespeople when distributing goods from different suppliers to retailers. On the other hand, Sabi doesn’t have such constraints, so whereas other platforms try to standardize operations around goods offtake, Sabi concentrates on offtake monitoring.
“We focus our processes, policies and monitoring around understanding the different types of users and monitoring how the third parties we work with are serving them,” said CEO Adasolum.
“As a result, the net experience of each off-taker is different and it works more for their particular business type. So I’m not going to go to a business that is used to working a particular way and change it but instead offer several other channels that they’re more comfortable with through our platform.”
These channels include offline agents, call centres, merchant partners, supplier centres and mobile app. Each stakeholder can access tools around inventory management, sales, tracking, digital invoices, analytics on the platform.
“We’re starting with what makes them comfortable, not what we think is best,” the CEO added.
Merchants on Sabi deal with FMCG goods and products in other sectors such as agriculture, electronics and chemicals. The category-agnostic platform is home to more than 175,000 merchants who have made B2B transactions totalling over
While Jumia, Africa’s biggest e-commerce player, records this volume on average after five years in operation, it has taken Sabi less than a year to achieve this feat which can be attributed to the size of the country’s informal B2B e-commerce retail market.
“The kind of data we’re seeing now in terms of like real-time visibility into whether people like this product or that product, that stuff is gonna accrue and grow exponentially over the next a few years,” the co-founder said.
“And then I think that the same way one saw in China in the late 90s the kind of hyper digitalization of what was a very informal economy, I see that happening faster in Africa than most people realize. I think it’s something people don’t realize how quickly it’s going to happen.”
Sabi’s bridge round is coming a year after closing a
Sabi is an attempt at platforming the informal sector and African trade via various online and offline channels. This means that Sabi tries to complement the middlemen (mainly distributors) in the B2B e-commerce retail chain rather than replace them, a model familiar with other prominent B2B e-commerce retail startups such as Sokowatch, MaxAB TradeDepot and Twiga.
“We’re not trying to be, you know, a tech-enabled digital distributor. We’re not trying to disintermediate a market full of hyper-specialization where one of the defining characteristics of the informal sector is you have all these middlemen and agents performing a very narrow role,” Adesina said to TechCrunch.
“We think that specialization is important for the sector to work properly — whether it’s aggregation, making a sale, knowing the customer especially well, all these middlemen play a key role. And the way we deal with them is we give them a set of tools and an infrastructure they can run their business on to make it more optimized.”
Sabi caters to the needs of manufacturers, distributors, wholesalers and retailers and classifies all of them as merchants.
The company operates an asset-light model and doesn’t own vehicles, warehouses or goods. But it provides visibility into these assets across the entire value chain from the demand and supply side and controls on a single platform.
Running this model exempts Sabi from the constraints a typical B2B e-commerce retail platform might face when acting as a distributor for manufacturers to retailers.
Anu Adasolum (Founder and CEO, Sabi)
For instance, asset-heavy platforms can’t move goods from two different suppliers in the same truck or use the same salespeople when distributing goods from different suppliers to retailers. On the other hand, Sabi doesn’t have such constraints, so whereas other platforms try to standardize operations around goods offtake, Sabi concentrates on offtake monitoring.
“We focus our processes, policies and monitoring around understanding the different types of users and monitoring how the third parties we work with are serving them,” said CEO Adasolum.
“As a result, the net experience of each off-taker is different and it works more for their particular business type. So I’m not going to go to a business that is used to working a particular way and change it but instead offer several other channels that they’re more comfortable with through our platform.”
These channels include offline agents, call centres, merchant partners, supplier centres and mobile app. Each stakeholder can access tools around inventory management, sales, tracking, digital invoices, analytics on the platform.
“We’re starting with what makes them comfortable, not what we think is best,” the CEO added.
Merchants on Sabi deal with FMCG goods and products in other sectors such as agriculture, electronics and chemicals. The category-agnostic platform is home to more than 175,000 merchants who have made B2B transactions totalling over
While Jumia, Africa’s biggest e-commerce player, records this volume on average after five years in operation, it has taken Sabi less than a year to achieve this feat which can be attributed to the size of the country’s informal B2B e-commerce retail market.
“The kind of data we’re seeing now in terms of like real-time visibility into whether people like this product or that product, that stuff is gonna accrue and grow exponentially over the next a few years,” the co-founder said.
“And then I think that the same way one saw in China in the late 90s the kind of hyper digitalization of what was a very informal economy, I see that happening faster in Africa than most people realize. I think it’s something people don’t realize how quickly it’s going to happen.”