Wasoko, formerly known as Sokowatch, is a Kenyan startup that is revolutionizing the way small businesses in East Africa access goods from suppliers. The company was founded in 2013 by Daniel Yu, and since then, it has grown rapidly, expanding its services to other countries in East Africa and raising significant funding to support its growth.
What is Wasoko?
Wasoko provides a digital platform that allows small businesses, particularly informal retailers, to order goods from suppliers using a mobile app. The platform streamlines the supply chain by allowing retailers to order goods directly from suppliers, who then deliver the goods directly to the retailers. This direct connection between retailers and suppliers helps to reduce the cost of goods and improve efficiency, benefiting both parties.
For example, let's say a small kiosk owner in Nairobi needs to restock their inventory of snacks and beverages. In the past, they would have had to physically travel to a wholesaler or distributor, place an order, and then arrange for delivery. With Wasoko, the retailer can simply use the mobile app to place an order for the desired goods, and the supplier will deliver them directly to the retailer's location. This process saves time and money, making it easier for small businesses to access the goods they need to succeed.
When was Wasoko Founded?
Wasoko was founded in 2013 under the name Sokowatch. The company began by serving informal retailers in Kenya but has since expanded to other markets in East Africa, including Tanzania and Rwanda.
Who are the Founders of Wasoko?
Daniel Yu is the founder of Wasoko. Yu is an American entrepreneur who has lived and worked in Kenya for several years. Before founding Sokowatch, Yu worked for several tech companies, including Google and IBM. He saw an opportunity to use technology to improve the efficiency of supply chains in East Africa, and Sokowatch was born.
How did Daniel come up with the idea of Wasoko?
It's not entirely clear how Daniel Yu got the idea to start Sokowatch, but his experience working in tech and living in Kenya likely played a role. According to a profile of Yu in Forbes, he was working for IBM in Kenya when he noticed that many small businesses in the country were struggling to access the goods they needed to succeed. He saw an opportunity to use technology to solve this problem and founded Sokowatch.
How much funding has Wasoko raised to date?
Wasoko, formerly known as Sokowatch, has raised over $150 million in funding since its founding in 2013. The company has undergone several funding rounds, with each round aimed at supporting the company's growth and expansion. Here is a breakdown of Wasoko's funding history:
Seed funding: In 2015, Sokowatch raised $200,000 in seed funding from various investors, including 4Di Capital and Savannah Fund. This initial funding was used to develop the company's mobile app and launch its services in Kenya.
Series A funding: In February 2018, Sokowatch raised $2 million in a Series A funding round led by 4DX Ventures. Other investors included Vertex Ventures and Timon Capital. The funding was used to expand the company's services to other markets in East Africa, including Tanzania and Rwanda.
Bridge funding: In October 2019, Sokowatch raised $2 million in bridge funding from Quona Capital and Amplo. The funding was used to support the company's continued expansion in East Africa.
Series A extension funding: In June 2020, Sokowatch raised an additional $14 million in a Series A extension funding round led by Quona Capital. Other investors included Amplo, Breyer Capital, and Vertex Ventures. The funding was used to invest in new initiatives aimed at improving the efficiency of supply chains in East Africa.
Debt financing: In February 2021, Wasoko secured $10 million in debt financing from the International Finance Corporation (IFC). The financing was used to support the company's ongoing operations and expansion in East Africa.
Series B: In March 2022, Wasoko raised $125 million in its Series B from Tiger Global Management and Avenir Growth Capital.
Overall, the significant amount of funding raised by Wasoko is a testament to the company's innovative approach and potential to make a significant impact in the region. With its latest funding round and ongoing initiatives, Wasoko is well-positioned to continue improving the efficiency of supply chains in East Africa and empowering small businesses in the region.
How big is the opportunity for Wasoko?
The opportunity for Wasoko is significant given the current state of the retail sector in East Africa. The region has a large and growing population, and a significant portion of the population relies on small, informal retail shops for their daily needs. These shops often face challenges in accessing affordable and reliable supplies, resulting in higher prices for consumers and limited growth opportunities for businesses.
Wasoko aims to address these challenges by leveraging technology to improve the efficiency of supply chains and make it easier for small businesses to access the products they need. The company's platform allows shop owners to order products directly from manufacturers and distributors, with delivery typically occurring within 24 hours. This approach has helped to reduce costs and improve access to products, leading to increased sales and profitability for small businesses.
The opportunity for Wasoko is particularly significant given the large and growing market for retail in East Africa. According to a report by the World Bank, the region's retail market is expected to grow at an annual rate of 7.3% between 2020 and 2025, driven by population growth, urbanization, and rising incomes. Additionally, there is a significant need for innovation in the supply chain sector, particularly in terms of reducing costs and improving efficiency.
Wasoko is well-positioned to capitalize on this opportunity, given its innovative approach and significant funding. The company has already expanded its services to multiple markets in East Africa, and with ongoing initiatives aimed at improving the efficiency of supply chains, there is significant potential for further growth and expansion in the coming years. Additionally, with the ongoing shift towards e-commerce and digital solutions in the region, Wasoko is well-positioned to take advantage of these trends and further cement its position as a leader in the East African retail sector.
Who are Wasoko's competitors?
As a provider of technology-enabled supply chain solutions for small retailers in East Africa, Wasoko (formerly Sokowatch) faces competition from several other companies. A key competitor is Twiga Foods. Founded in 2014, Twiga Foods is a Kenyan company that connects farmers to retailers via a mobile-based platform. The company sources fresh produce directly from farmers and delivers it to small retailers within 18 hours of ordering. Twiga Foods has raised over $100 million in funding to date and has expanded its services to several markets in East Africa.
Can Sokowatch become Kenya's first unicorn?
Africa currently has 7 unicorns. Of these 4 are from Nigeria (Interswitch, OPay, Flutterwave and Andela). The others are Wave Mobile Money, Chipper Cash and the recent unicorn, MNT Halan of Egypt. Jumia and Fawry are the other African startups to ever cross the $1bn valuation but are now public companies.
Sokowatch's recent funding round, in which it raised $125 million at a valuation of $625 million, was a significant milestone for the company and suggests that it has significant potential for growth and scale. While it is difficult to predict whether Sokowatch will become Kenya's first unicorn, there are several factors that suggest its feasibility.
Firstly, Sokowatch operates in a large and rapidly growing market, with significant demand for its services across East Africa. The company's innovative technology and efficient supply chain solutions have helped it to establish a strong foothold in the region, and its expansion into new markets suggests that it has significant growth potential.
Secondly, Sokowatch has a strong track record of securing funding from a range of investors, including some of the biggest names in venture capital. This suggests that there is a high level of confidence in the company's business model and management team, which is an important factor in achieving unicorn status.
Finally, Sokowatch's recent funding round, which was one of the largest ever raised by an African tech startup, provides the company with significant resources to fuel its growth and expansion plans. With the backing of some of the world's top investors, Sokowatch is well-positioned to invest in new technologies, expand its team, and further scale its operations.
Of course, there are also several challenges that Sokowatch will need to overcome in order to achieve unicorn status, including intense competition from other players in the market and the need to maintain a sustainable business model as it continues to scale. However, given the company's track record of success and the significant market opportunity it is targeting, it is certainly possible that Sokowatch could become Kenya's first unicorn in the coming years.
Sokowatch, now known as Wasoko, is a Kenyan startup that is transforming the way small retailers across East Africa access and manage their supply chains. The company's innovative technology and efficient logistics solutions are helping to drive economic growth and support small businesses in the region.
Sokowatch has achieved significant milestones over the years, including securing funding from top investors, expanding its services to new markets, and partnering with leading brands to deliver products to small retailers across the region. The company's recent funding round, in which it raised $125 million at a valuation of $625 million, is a testament to the strength of its business model and the potential for further growth and expansion.
As Sokowatch continues to scale and evolve, it will face challenges, including intense competition from other players in the market, the need to maintain a sustainable business model, and the ongoing impact of COVID-19 on the region. However, the company's strong management team, track record of success, and commitment to supporting small businesses suggest that it is well-positioned to continue driving positive change in the region and beyond.