STARTUP Sabi SCORES $6M BRIDGE ROUND, EXPANDS ITS B2B RETAIL PLATFORM TO MARKETS BEYOND NIGERIA
Over the years, most businesses in Nigeria operate offline until a few years ago when startups brought about digitization by providing infrastructure with a range of e-commerce and financial services. However, it was figured out that Nigeria has over 40 million micro, small and medium businesses worth more than $244 billion. As part of digitization, Startup Sabi and a Rensource-spinoff announced it has scored a $6 million bridge round backed by pan-African VC firm CRE Ventures.
The company’s latest bridge round is coming a year after securing a $2 million seed round from CRE Ventures, Atlantic Ventures, Janngo Capital, and Waarde Capital.
Sabi which began as Rensouce, has always had at its helm ‘Ademola Adesina’ and ‘Anu Adasolum’ since 2015, the former as founder and CEO while Adasolum is the COO. Rensource which has been providing power to small and medium businesses is poised to look into the pain of SMEs and find ways to add value beyond energy provision.
Meanwhile, the pandemic impacted Rensource business, which eventually saw the team develop a concept known as Sabi in October 2020. Based on this, Adasolum led Sabi’s efforts as founder and CEO following the company’s evolution in March, while Adesina now holds the role of a co-founder and director.
Sabi as a platform is believed to be a complimentary interface for middlemen (notably distributors) in the B2B e-commerce retail chain rather than embracing other measures deployed by startups like TradeDepot, Twiga, and Sokowatch.
“We’re not trying to be, you know, a tech-enable 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 told a source familiar with the matter.
“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”.
Startup Sabi takes care of the needs of manufacturers, wholesalers, distributors, and retailers while classifying them as merchants.
The subject startup actually functions as an asset-light model and does not own vehicles, goods, or warehouses. Instead, it offers visibility into these assets across the entire value chain from the angle of demand and supply, and controls on a single platform. This meant total relief from typical constraints a B2B e-commerce retail platform might face when it’s acting on behalf of manufacturers as a distributor to retailers. However, as other platforms focus on standardize operation 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”, Sabi CEO Adasolum said.
“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 offers several other channels that they’re more comfortable with through our platform”.
To ensure it delivers, the company’s channels include offline agents, call centres, merchant partners, mobile app, and supplier centres. As a result, each stakeholder can access tools around inventory management, sale, tracking, digital invoices, and analytics on the platform.
“We’re starting with what makes them comfortable, not what we think is best”, Adasolum added.
Sabi currently commands over 175,000 merchants who have made B2B transactions totalling over $200 million per year, with more than 10,000 agents that are serving these merchants on the company’s network. However, these merchants on Sabi practically deal with FMCG goods and products in different sectors like electronics, agriculture, and chemicals.
Nonetheless, the subject company makes its money via transaction fee precisely when a merchant performs any sale on the marketplace, in addition to that Sabi also earn a margin for providing financing to them.
As it plans to provide manufacturers with visibility and data overview coupled with direct engagement, Adesina made clear that in Q1 2022 Sabi plans to roll out a subscription model designed for agents in order to pay a monthly fee to access a reseller model.
Yet, growing an average of 40% on every passing month in Nigeria, the startup intends to replicate its rapid growth in other African markets, notably Kenya and South Africa.
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