Lagos-Based E-Commerce Startup Sabi Raises $38 Million in New Funding Round
May 20, 2023
Michael Isaac
2 minute(s) Read
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Sabi, a B2B e-commerce startup based in Lagos, has successfully raised $38 million in Series B funding, valuing the company at $300 million. This funding round signifies a renewed investor interest in the B2B e-commerce market, which is currently undergoing some transformations.

The round saw participation from notable investors such as CommerzVentures, a fintech investor based in Frankfurt, Norrsken22, a growth-stage investor focused on Africa from Stockholm, Fluent Ventures and Proof VC, both growth-stage funds based in the United States, and pan-African early-stage investors CRE Venture Capital and Janngo Capital, among others.

Sabi, which offers digital commerce infrastructure to Africa's informal economy, operates in Nigeria, Kenya, and South Africa. Despite the challenges faced by many B2B e-commerce startups in recent times, Sabi has been experiencing remarkable growth since its inception just two and a half years ago. The company's network boasts over 300,000 merchants, with an annualized gross merchandise volume (GMV) exceeding $1 billion, according to insiders familiar with the company's financials.

In comparison to other players in the market, such as Wasoko, which secured $125 million in funding last year, Sabi's operational model allows for higher merchandise numbers. Sabi employs an asset-light model and serves as an intermediary in the B2B e-commerce retail chain, connecting manufacturers, distributors, wholesalers, and retailers (referred to as merchants). The company utilizes offline agents, call centres, merchant partners, and supplier centres to facilitate interactions among stakeholders in the value chain.

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Sabi's executives attribute the company's success to its focus on fundamentals, sound unit economics, and profitability before expanding further. This approach, combined with the ability to adapt to market dynamics, has enabled Sabi to maintain sustainable growth, even in challenging market conditions.

The startup generates revenue through a 5-6% take rate on marketplace transactions and earns a financing margin on credit-related transactions it facilitates. Sabi has also facilitated over $100 million on behalf of local microfinance banks and fintech lenders, highlighting its involvement in the B2B payments value chain.

With a monthly order volume of 15,000 and month-on-month growth exceeding 20%, Sabi is launching new products and features to target its agents and last-mile merchants. The company plans to expand into new markets, including Tanzania, Malawi (via acquisition), the Democratic Republic of Congo (DRC), and Francophone West Africa, as part of its future growth strategy.

May 20, 2023
Michael Isaac
2 minute(s) Read

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