Lagos-based startup Sabi, a B2B e-commerce platform catering to Africa’s informal economy, has successfully secured $38 million in Series B funding, reaching a valuation of $300 million. The investment round witnessed participation from esteemed investors such as CommerzVentures, Norrsken22, Fluent Ventures, Proof VC, CRE Ventures, and Jaango, highlighting renewed investor interest in the B2B e-commerce sector in Africa.
Sabi, which operates in Nigeria, Kenya, and South Africa, aims to bridge the gap between informal retailers and manufacturers by leveraging digital platforms, logistics, and distribution services. The informal trade sector constitutes a significant portion of Africa’s $1 trillion retail market, presenting ample opportunities for innovative startups seeking to revolutionize the industry.
While several B2B e-commerce startups have faced challenges amid the changing market dynamics and rising interest rates, Sabi continues to thrive. In just two and a half years, the company has achieved remarkable growth. Initially boasting over 175,000 merchants on its network and an annualized GMV (Gross Merchandise Volume) run rate of $200 million, Sabi has seen substantial progress, with its merchant base expanding to over 300,000 and the annualized GMV exceeding $1 billion.
In comparison to other well-funded B2B e-commerce startups like Wasoko, which reported 50,000 active merchants and processed over $300 million in GMV, Sabi’s operational model and customer targeting strategies have enabled it to achieve higher merchandise numbers.
Sabi operates on an asset-light model, complementing the intermediaries in the B2B e-commerce retail chain, from manufacturers and distributors to wholesalers and retailers. By utilizing offline agents, call centers, merchant partners, and supplier centers equipped with inventory management, sales, tracking, digital invoices, and analytics tools, Sabi ensures seamless communication and collaboration among stakeholders.
According to Sabi’s executives, the company’s success can be attributed to its growth model, which prioritizes sound unit economics, profitability, and a focus on the fundamentals before expanding further. The startup’s ecosystem-based approach treats manufacturers, distributors, wholesalers, and retailers as merchants, facilitating adaptability to market dynamics and ensuring long-term sustainability.
Sabi’s revenue streams primarily rely on a 5-6% take rate from marketplace transactions and earnings from financing margins on credit-related transactions it facilitates. The company has also facilitated over $100 million on behalf of local microfinance banks and fintech lenders.
With a monthly order volume of 15,000 and experiencing consistent month-on-month growth of over 20%, Sabi is actively launching new products and features to cater to its agents and last-mile merchants. The startup is also planning expansion into other markets, including Tanzania and Malawi via acquisition, the Democratic Republic of Congo (DRC), and Francophone West Africa, demonstrating its ambition and potential for further growth.
Sabi’s impressive performance, combined with its innovative business model and commitment to sustainability, positions the company as a key player in Africa’s thriving B2B e-commerce sector.
