4DX Ventures closes second fund with $60M, adds Dikembe Mutombo as senior advisor

Pan-African venture capital firm 4DX Ventures has completed the final close of its second fund at $60 million. The second fund, launched in the first quarter of this year, was expected to close at $50 million, but investor and limited partner (LP) interest saw the fund oversubscribed.

The LPs involved are unnamed. They include U.S.-based asset managers, a university endowment, global family offices, tech founders, hedge fund portfolio managers and investors from private equity and venture capital, the firm said.

The effort by the New York, Accra and Cairo-based firm, an early investor in African unicorns Flutterwave and Andela, follows large fund closes by the likes of Partech, Novastar, Algebra and TLcom Capital that have sporadically happened on the continent.

With large funds, most of these firms tend to find their sweet spots in growth-stage deals, particularly in Series A and B. But recently, they are beginning to get involved in earlier rounds to gain stakes to help them compete for the late-stage investments.

For instance, TLcom Capital, a $71 million pan-African fund that initially made investments only in the growth stage, led pre-seed rounds in Nigeria’s Okra and Autochek last year (it co-led the latter with 4DX Ventures).

Pre-seed to Series B are the stages on which 4DX Ventures is focused, founding partners Walter Baddoo and Peter Orth told TechCrunch in an interview.

“The quality of founders and team is really our North Star. And our goal is to partner with the very best teams going after transformative opportunities across the continent,” Orth said. “And you know, Walter and I personally have experienced investing in companies from the idea stage to public markets and, generally speaking, we think that from the pre-seed to Series B stage, it’s still early enough to deliver the type of returns that we’re looking for as an early-stage fund.”

The founding partners have known each other for more than 20 years. Between them, they have years of operational and financial experience working at Morgan Stanley, J.P. Morgan and Bridgewater Associates. They started 4DX Ventures officially in 2017 after three years of investing personal funds in African startups. Global talent marketplace Andela and payments company Flutterwave were part of the firm’s early success, generating significant secondary returns due to their unicorn status.

4DX Ventures’ first fund was a bit over $20 million and it invested in startups such as Ghanaian health tech startup mPharma and Kenyan B2B e-commerce platform Sokowatch. It has welcomed the likes of Autochek, Breadfast, MaxAB, Taager, Trella and Yoco from this second fund of $60 million.

Pan-African VC firms predominantly write their checks to the Big Four markets: Nigeria, South Africa, Egypt and Kenya because that’s where most of the continent’s opportunities reside. 4DX Ventures is not entirely different, as most of its portfolio companies are based in these four countries. But Orth is quick to add that the firm has begun looking into other countries, especially in the Francophone region; case in point, the investment it co-led into Ivorian fintech CinetPay this month.

As for industries, 4DX Ventures says it is a “generalist,” but most of its investments have taken place in fintech, B2B e-commerce, healthcare and logistics.

“Our goal is ultimately to invest in companies that are building products that solve foundational problems on the continent and also in the largest markets because the size of the market matters quite a bit for the potential outcome of companies,” Baddoo said about the markets and industries that pique 4DX’s interests.

“And so we love when folks are building products in markets that are truly large, and potentially give the companies that opportunity to have a pretty dramatic growth path throughout their lifecycle.”

Baddoo also highlighted that asides from the market and industries, 4DX Ventures also seeks “strong founders with a growth mindset who have a lot of grit” and can “marry a very clear vision of what they’re trying to build with a thoughtful approach to strategy and execution.”

The pan-African firm writes checks of about “a few $100,000 to a few million” across all stages (pre-seed to Series B), according to Orth.

Since launching its first fund, 4DX Ventures has invested in more than 40 companies across Africa (its primary market), the Middle East and the U.S., with a handful of companies. One of its portfolio companies, U.S.-based Swarm Technologies, got acquired by SpaceX.

4DX Ventures says its portfolio companies have raised more than $1.2 billion in funding, one of the largest follow-on investments known for an African-focused fund.

The close of this second fund also brought additional experience to the firm’s management team in two general partners, Dan Marlo and Raaid Ahmad. Before their appointment, the pair served as senior advisors to the firm since 2017.

Both bring years of experience operating, investing and advising companies in various sectors such as fintech, telco, software, sports, social and health, the firm said in a statement. 

“Both Dan Marlo and Raaid have been senior advisors to 4DX since the beginning of the fund. And prior to them joining as senior advisors, we’ve known each other for a decade. They are both experienced operators who have a scarce combination of skill sets. And going into our next Fund and the future of the company, we couldn’t think of two better people to join to help us, you know, carry the firm into our next chapter here,” said Orth on the appointment.

NBA Hall of Famer and Congolese-American former professional basketball player Dikembe Mutombo, known for his humanitarian and entrepreneurial work, especially for Africans and African Americans, will now serve in the firm’s senior advisory role.

He joins a current senior advisor roster that includes Karen Karniol-Tambour of Bridgewater Associates, Jay Zaveri of Social Capital and Sakya Duvvuru of Nellore Capital. 

Baddoo, who is Ghanaian by birth, is bullish on his firm’s work and hinted that his association with the continent is part of what drives the deals 4DX Ventures makes.

“Growing up in Accra, Ghana, a lot of these companies are solving problems that I witnessed, personally firsthand. And so the fact that we can dedicate our time to back some of the greatest founders of this generation that are building truly special and important companies on a continent, to me, is a dream. And the ability to do that where I come from is quite important. So my hope and belief is that 4DX will continue to play a very pivotal role in the ecosystem.”

4DX Ventures and Flutterwave back Francophone Africa’s CinetPay in $2.4M round

CinetPay, a payment gateway that allows e-merchants and merchants to accept mobile money and other forms of payments in Francophone Africa, has secured $2.4 million in seed funding.

Pan-African venture capital fund 4DX Ventures and unicorn Flutterwave are the investors in the round, and it signifies two particular markers for the pair. CinetPay is their first investment in the Francophone region.

CinetPay was founded by Idriss Monthe and Daniel Dindji in 2016 after CEO Monthe experienced issues collecting payments at his previous startup, CinetCore, a site specializing in the sale of online domain names.

“When we launched our website to sell domain names online, we faced difficulty in collecting online payment after creating many PayPal accounts which were blocked by PayPal because we were in Africa,” the CEO told TechCrunch.

“But the cost that we make is that in Francophone Africa 80% of the population have a mobile money account. And between 10 and 20% of people have a bank account and credit cards. We decided to explore the tract of mobile money and create a payment gateway, where we aggregate all mobile money available in Francophone Africa to enable merchants to accept online payments.”

The Ivorian startup acts as an online and point-of-sale payment solution for merchants to process payment from more than 130 different payment operators — mobile-money, bank cards, wallets — in nine French-speaking African countries: Ivory Coast, Senegal, Cameroon, Mali, Burkina Faso, Togo, Congo, Guinea and Benin.

On the platform, merchants have to open an account and then upload their KYC, integrate Cinet’s APIs and start collecting payments. Each merchant pays an annual subscription fee of $20 a year and Cinet collects 1-1.5% commission on every transaction made.

CinetPay team

Merchants on the platform range from e-commerce platforms and digital public services to insurance companies and schools. Since its inception, over 12,000 merchants have registered on the platform. However, Monthe admits that only 400 of them are active. Asked why the company had a poor retention rate, he said most active merchants have opened several accounts in the past before sticking with one.

It’s also possible that CinetPay’s numbers are a reflection of the presence of bigger payments gateways such as MFS Africa and PawaPay that target sub-Saharan Africa’s 562 million registered mobile money accounts.

Still, the company has done fine in its own right. So far, it has processed more than 30 million transactions for these 400 active merchants, processing about $12.5 million in transactions monthly. 

“We’ve been tracking the Francophone Africa market for some time now, and have been impressed by CinetPay’s ambitious goal to digitize payments across the region,” said Walter Baddoo, co-founder and general partner at 4DX Ventures. “We look forward to partnering with the CinetPay team alongside our long-time portfolio company, Flutterwave, to help usher in the next phase of digital payments across the Francophone region.”

Flutterwave’s involvement in the round is a continuation of the unicorn’s partnership with CinetPay that started in 2019, said both companies in a statement. It is also a diversification from the mobile money moves Flutterwave has made recently where it signed a partnership with MTN to allow businesses in select countries to receive MTN mobile money (MoMo) via the gateway.

Flutterwave CEO Olugbenga “GB” Agboola said the investment in CinetPay is an example of the duo’s shared vision to “simplify payments on the continent.”

CinetPay said the seed investment gives it the opportunity to boost its sales and marketing efforts across the markets in West and Central Africa.

Monthe maintained that despite the company’s size being relatively smaller to that of its competitors, its geographical presence, technology and mission to “simplify payment and make it accessible via all channels” makes it different from other players. Ultimately, the plan is to be the foremost payment gateway in the next four years.

“Our vision is to be the first payment aggregator in Francophone Africa by 2025. First in terms of our geographical presence in 15 countries in Francophone Africa. First in terms of innovation, first in terms of market share,” he remarked in a grandiose manner.

Abwaab raises $20M Series A led by BECO Capital to expand across MENA and Pakistan

Jordan-based online learning platform Abwaab has raised $20M in a Series A funding (following a $5M seed round in March of this year) making it one of the most funded edtech startups in the Middle East, North Africa and Pakistan (MENAP), a region that encompasses 160 million students.

The round was led by existing investor BECO Capital (UAE) and joined by 4DX Ventures (USA), GSV Ventures (USA), Watar Partners (KSA) and others. Founded in late 2019, the startup has expanded from Jordan into Egypt and Pakistan.

Founders Hamdi Tabbaa, Sabri Hakim, and Hussein AlSarabi, position their platform at secondary school students, offering content tailored to local curricula, filling the gaps in educational resources available online, while tackling the region’s high dependence on offline tutoring.

On Web and native apps, students participate in lessons, get feedback, and join discussion boards.

Abwaab says it has experienced strong growth during the pandemic-halted lockdown where children were unable to attend normal schooling.

Abwaab on tablet

Abwaab on tablet

In Jordan, where it has an active freemium subscription model, students are paying a one-off subscription to unlock access to the platform for the whole academic year.

It claims to have grown by 10x in the number of active users throughout the 2020/21 academic year. It previously acquired Pakistani edtech startup Edmatrix.

Hamdi Tabbaa, Abwaab’s Co-founder & CEO said, “Our mission since inception has been to make learning more accessible, affordable, and fun, by building a comprehensive ecosystem that changes the way students learn, while also equipping them with the tools needed to get ahead in life.”

BECO Capital’s Abdulaziz Shikh Al Sagha said: “Abwaab is on a clear path to establishing themselves as market leaders within the region and we are proud to have had the chance to further deepen our partnership with Hamdi, Sabri, Hussein and the whole Abwaab team.”

Peter Orth, Managing Partner at 4DX Ventures added: “We believe very much in Abwaab’s mission to make high quality, outcome driven education more affordable and accessible, and we believe that they are poised to become the dominant in the MENAP region.”

Its competitors include offline tutoring centers; Noon Academy (a Saudi based social learning platform; EdKasa (Pakistan based test prep app); Ashtar (Egypt based learning app).

Abwaab says it competes on the basis of offering micro-lessons that match every country’s national curriculum in bite sizes; assessments for test prep; chat or video tutoring; and a low annual USD15 subscription, which compares to the cost of one hour of tutoring.

TLcom and 4DX drive $13.1M seed round to scale Autochek’s platform across Africa

African automotive company Autochek has secured a $13.1 million seed round almost a year after raising $3.4 million pre-seed in November 2020.

The company, led by CEO Etop Ikpe, has seen astonishing growth in demand since launching in August last year, not just from a consumer perspective but also from its business and banking partners. And who else to lead the seed round other than pan-African VC firms TLcom Capital and 4DX Ventures — the same investors that had the conviction to lead the startup’s pre-seed round.

Other existing investors, such as Golden Palm Investments, Enza Capital and Lateral Capital, invested as well. First-time investors ASK Capital and Mobility 54 Investment SAS, the venture capital arm of Toyota Tsusho and CFAO Group, also participated. In total, Autochek has raised $16.5 million in two financing rounds.

When Ikpe spoke to TechCrunch last month, the company had just finalized the acquisition of Cheki’s businesses in Kenya and Uganda from Ringier One Africa Media (ROAM). The deal closed almost a year after Autochek bought Cheki Ghana and Cheki Nigeria to start its business.  

Although acquisitions have made up all the company’s expansion strategy to this point, it did not take that route into the Ivory Coast — it partnered with CFAO Group to bring its marketplace to the Francophone region.

The expansion takes the number of African markets in which Autochek is present to five. Africa’s used car market is a $45 billion industry, where the vehicle penetration rate stands at a meager 5%. And because the market lacks transparency, lenders (mainly banks) have found it challenging to offer loans to individuals, commercial or ride-hailing drivers.

Autochek’s platform operates a marketplace-driven model with a focus on financing and after-sales. Its primary customers? Dealerships, banks and the end consumers (those who buy cars on the platform).

When a dealership signs up on the platform, Autochek assigns a workshop to commence inspections on the vehicles owned by the dealership. The assessments and some algorithmic checks on Autochek’s system help to give a sense of the status and condition of the car, determining whether it is in a state to be financed.

“That’s the big risk for the banks because they do not want a situation where they finance a car and the next day, the engine knocks,” said Ikpe explaining why Autochek goes through these processes.

After inspection, Autochek alerts all the banks on its platform that the vehicle is ready to be financed and moves it to the marketplace.  Following an extensive review, the banks respond with their offers. The end-user then has a pool of financing rates from the banks to choose from and can apply to buy the car after Autochek develops a credit profile. The loan application process takes about 48 hours, down from an industry standard of 40-45 days.

Once sorted, Autochek supports the banks in disbursement and ensuring that the vehicle is registered, insured and tracked. Then the car gets fed into Autochek’s after-sales network, where it gets maintained for free whenever mechanical issues come up

Autochek makes money by charging customers and banks a fee after a successful disbursement and commissions from dealerships.

“We’re not just there for the banks and customers at the point of disbursal; we stay with them throughout the lifecycle of the loan,” said Ikpe. “We’ve built that ecosystem using technology to stitch all these various verticals together so that at the end of the day, we can create more value with financing being our core driver within the platform.”

Last year when Autochek announced its pre-seed round, it had 12 bank partnerships. That number has increased to about 70 banks, such as Access Bank, Ecobank, UBA, Bank of Africa and NCBA Bank. These banks have processed more than 46,000 loan applications to date; this number was just 10 last November, the company said.

Initially, Autochek worked with only used cars. But the company has since launched a financing product for trucks and new cars. More than 1,200 dealerships use Autochek’s network and over 15,000 financeable vehicles are on the marketplace across all markets.

Ikpe asserts that introducing these new verticals came from the demand from its partner banks, who have been integral to where the company sets up shop on the continent.

But in some cases, despite seeming demand and the presence of a partner bank, Ikpe says Autochek has declined to move into new markets where it did not perceive potential at that moment.

Autochek

The Autochek team

Presently settled in West and East Africa, Autochek has its sights set northward and southward on the continent — Egypt and South Africa to be precise.

“We are speaking to a few partners around potentially how we can make entry and I think between now and probably Q2 next year, we would have kind of identified the best kind of product-market fit for those markets. But we expect that by Q3, we should have a presence in those markets,” said Ikpe, who was the co-founder and chief executive at Jiji subsidiary Cars45 before starting Autochek.

Ikpe’s drive and experience and Autochek’s blitzscaling growth are top of the list on why TLcom Capital re-invested in the one-year-old company, according to partner Andreata Muforo. For Walter Baddoo, managing partner at 4DX Ventures, it’s that the team has demonstrated “the talent, ambition, and domain expertise needed to build a complete end-to-end car ownership experience for customers.”

In Africa, Uber and Bolt dominate the ride-hailing space, leading most mobility startups to tackle vehicle financing and logistics problems instead.

Autochek and other vehicle financing startups like Moove and FlexClub have raised large sums of money, signifying rising investor interests in the space and a maturing competitive landscape.

In Autochek’s case, investors’ interest was such that Autochek closed at twice what it initially intended to raise. Frankly, for a business that deals with automotive tech in Africa, that speaks volumes. But then again, Autochek has a fintech element with its financing model. So, its large seed round does not come as a big surprise, considering how fintech dominates the African VC landscape and holds the record for the highest seed-stage investments from PalmPay, Kuda and PawaPay.

Like any startup, Autochek wants to be a market leader. It plans to inject the new capital into bolstering its auto loan processing platform, deepen its footprint in West Africa and, ultimately, leverage Toyota Tsusho’s vast retail network across 54 African countries to deepen its expansion further.

Egyptian social e-commerce platform Taager raises $6.4M led by 4DX Ventures

The global social market is rapidly growing. With over 1.25 million online social sellers in Egypt alone, the Egyptian social e-commerce market is forecast to be worth more than $14.8 billion by 2024.

One of its players, Taager, is a social e-commerce platform enabling online merchants with end-to-end logistics. Today, it is announcing that it has secured $6.4 million in seed funding. 

The seed round was led by Pan-African focused VC 4DX Ventures. It also included participation from Raed Ventures, Beco Capital, Breyer Capital and some private investors, including Magnus Olsson, co-founder of Careem. This is Breyer Capital’s first investment in the MENA region, and the round brings Taager’s total investment to more than $7 million since launching in December 2019.

Social media platforms such as Facebook, Instagram and more recently TikTok have made advertising easier for online merchants to target customers with their products. Offline, there’s a wide range of last-mile companies to distribute these products. However, there is a fragmentation between these processes for new merchants. They are left to fend for themselves when starting out and during the delivery of products; a perfectly executed end-to-end cycle, if you will.

“Consider I’m an undergraduate, and I want to own my own e-commerce store. Where do I get the product from? How do I ship them, where do I store them? Where do I make the fulfilment, what about financing it, how am I going to deliver it?” CEO Mohammed Elhorishy said to TechCrunch concerning the dilemma new merchants face.

Elhorishy argues that typically a merchant would need to meet different suppliers to strike deals before proceeding to do the same with shipping and last-mile delivery companies.

“With Taager, we can now see the trend of people who would never have been able to build businesses on their own, now using Taager and getting the exact outcome of the very painful processing they would have gone through if they went about it manually,” he added.

So how does this work exactly? Essentially, Taager has built a B2B platform to provide a one-stop shop for these online merchants and suppliers. The platform provides online merchants and suppliers with a suite of backend and integrated services, from operational and logistical infrastructure such as storage and shipping to an online marketplace to host their products, connecting sellers with wholesalers.

Taager

Taager Team

The company claims to use AI and data science to enable first-time sellers to start and scale their online business with relatively low risk. It offers a transparent pricing structure and an enhanced product selection process, freeing online sellers to focus on running their business while Taager handles end-to-end operations

After getting products from suppliers on Taager, merchants can take pictures and descriptions to Facebook (via ads or its Marketplace platform), TikTok or Instagram.

“They start utilising their marketing skills. They do advertising, run campaigns, and once an order is fulfilled, the merchants will put it on our site and Taager fulfils the end-to-end cycle. This way, merchants, without any inventory or stock or cash, can start a business and scale it from one order to a thousand orders per day because Taager made it seamless for them,” said the CEO.

On the other end, Taager takes a margin of every sale and aggregates data points. The platform does this to suggest the products that often sell to merchants and what pricing is best.

Elhorishy explains the need to employ this strategy. According to him, while Taager is not involved with the day-to-day sale of merchant’s products, the data it provides will act as growth engines alongside the heavy lifting performed by providing warehousing and last-mile services.

“It’s all about phases. You need to reach specific data-critical points where you can suggest products that make sense to the merchants. We perceive ourselves mainly as a technology and data company that has the necessary presence on the ground to fulfil this. We’re trying to automate operations as much as possible.”

Presently, Taager claims to have 5,000 merchants on its platform, critical components to the 40% month-on-month increase in Gross Merchandise Value (GMV) Elhorishy says the startup enjoys. While he did not comment on the platform’s number of suppliers, he talks about how difficult it was to onboard them initially. These suppliers, currently in their hundreds, have a plethora of options to sell their products, so Taager’s catch was to provide them with better pricing and thousands of merchants, meaning their products get sold faster. In addition to this was insights on how to expand their products and make faster imports.

“Now they come to us asking what we think the market needs, whereas it was a very big challenge in the beginning because they weren’t used to this kind of business. Another challenge was managing the last-mile operations, and now we have teams managing relationships with a wide variety of last-mile companies,” Elhorishy said of some challenges faced by the company early on.

A high margin business, as Elhorishy claims, Taager will be looking to deploy the new capital into its rapidly growing operations. It is also making hires across all levels in the company and plans to scale across MENA.

Social e-commerce globally is on the rise, and in MENA as well. Jim Breyer of Breyer Capital is enthused by this growth and Taager’s traction in the space. He believes there’s a great opportunity for Taager to replicate its unique data-driven approach for further growth across the region.

Taager’s growth also proved decisive in getting a check from its lead investor. Peter Orth, co-founder and managing partner at 4DX Ventures, said, “The Taager team have achieved very impressive results incredibly quickly, and also built one of the most impressive teams in the ecosystem. Their focus on quality and execution and a very unique approach to empowering e-commerce entrepreneurs is a dominant combination. We’re thrilled to partner with the team in the next phase of the company’s growth.”

Egyptian social e-commerce platform Taager raises $6.4M led by 4DX Ventures

The global social market is rapidly growing. With over 1.25 million online social sellers in Egypt alone, the Egyptian social e-commerce market is forecast to be worth more than $14.8 billion by 2024.

One of its players, Taager, is a social e-commerce platform enabling online merchants with end-to-end logistics. Today, it is announcing that it has secured $6.4 million in seed funding. 

The seed round was led by Pan-African focused VC 4DX Ventures. It also included participation from Raed Ventures, Beco Capital, Breyer Capital and some private investors, including Magnus Olsson, co-founder of Careem. This is Breyer Capital’s first investment in the MENA region, and the round brings Taager’s total investment to more than $7 million since launching in December 2019.

Social media platforms such as Facebook, Instagram and more recently TikTok have made advertising easier for online merchants to target customers with their products. Offline, there’s a wide range of last-mile companies to distribute these products. However, there is a fragmentation between these processes for new merchants. They are left to fend for themselves when starting out and during the delivery of products; a perfectly executed end-to-end cycle, if you will.

“Consider I’m an undergraduate, and I want to own my own e-commerce store. Where do I get the product from? How do I ship them, where do I store them? Where do I make the fulfilment, what about financing it, how am I going to deliver it?” CEO Mohammed Elhorishy said to TechCrunch concerning the dilemma new merchants face.

Elhorishy argues that typically a merchant would need to meet different suppliers to strike deals before proceeding to do the same with shipping and last-mile delivery companies.

“With Taager, we can now see the trend of people who would never have been able to build businesses on their own, now using Taager and getting the exact outcome of the very painful processing they would have gone through if they went about it manually,” he added.

So how does this work exactly? Essentially, Taager has built a B2B platform to provide a one-stop shop for these online merchants and suppliers. The platform provides online merchants and suppliers with a suite of backend and integrated services, from operational and logistical infrastructure such as storage and shipping to an online marketplace to host their products, connecting sellers with wholesalers.

Taager

Taager Team

The company claims to use AI and data science to enable first-time sellers to start and scale their online business with relatively low risk. It offers a transparent pricing structure and an enhanced product selection process, freeing online sellers to focus on running their business while Taager handles end-to-end operations

After getting products from suppliers on Taager, merchants can take pictures and descriptions to Facebook (via ads or its Marketplace platform), TikTok or Instagram.

“They start utilising their marketing skills. They do advertising, run campaigns, and once an order is fulfilled, the merchants will put it on our site and Taager fulfils the end-to-end cycle. This way, merchants, without any inventory or stock or cash, can start a business and scale it from one order to a thousand orders per day because Taager made it seamless for them,” said the CEO.

On the other end, Taager takes a margin of every sale and aggregates data points. The platform does this to suggest the products that often sell to merchants and what pricing is best.

Elhorishy explains the need to employ this strategy. According to him, while Taager is not involved with the day-to-day sale of merchant’s products, the data it provides will act as growth engines alongside the heavy lifting performed by providing warehousing and last-mile services.

“It’s all about phases. You need to reach specific data-critical points where you can suggest products that make sense to the merchants. We perceive ourselves mainly as a technology and data company that has the necessary presence on the ground to fulfil this. We’re trying to automate operations as much as possible.”

Presently, Taager claims to have 5,000 merchants on its platform, critical components to the 40% month-on-month increase in Gross Merchandise Value (GMV) Elhorishy says the startup enjoys. While he did not comment on the platform’s number of suppliers, he talks about how difficult it was to onboard them initially. These suppliers, currently in their hundreds, have a plethora of options to sell their products, so Taager’s catch was to provide them with better pricing and thousands of merchants, meaning their products get sold faster. In addition to this was insights on how to expand their products and make faster imports.

“Now they come to us asking what we think the market needs, whereas it was a very big challenge in the beginning because they weren’t used to this kind of business. Another challenge was managing the last-mile operations, and now we have teams managing relationships with a wide variety of last-mile companies,” Elhorishy said of some challenges faced by the company early on.

A high margin business, as Elhorishy claims, Taager will be looking to deploy the new capital into its rapidly growing operations. It is also making hires across all levels in the company and plans to scale across MENA.

Social e-commerce globally is on the rise, and in MENA as well. Jim Breyer of Breyer Capital is enthused by this growth and Taager’s traction in the space. He believes there’s a great opportunity for Taager to replicate its unique data-driven approach for further growth across the region.

Taager’s growth also proved decisive in getting a check from its lead investor. Peter Orth, co-founder and managing partner at 4DX Ventures, said, “The Taager team have achieved very impressive results incredibly quickly, and also built one of the most impressive teams in the ecosystem. Their focus on quality and execution and a very unique approach to empowering e-commerce entrepreneurs is a dominant combination. We’re thrilled to partner with the team in the next phase of the company’s growth.”

Sokowatch raises $14M to digitize Africa’s informal B2B supply-chain

Kenya based B2B e-commerce startup Sokowatch has raised $14 million in Series A funding toward its mission of revamping supply-chain markets for Africa’s informal retailers.

From Nairobi, the company has created a platform that connects merchants directly to local and multinational suppliers — such as Unilever and Proctor and Gamble — and digitizes orders, payments and delivery-logistics.

Since launching in 2016, and raising a $2 million seed round in 2018, Sokowatch has expanded within Kenya and into Rwanda, Tanzania and Uganda.

With its Series A, the startup plans to broaden its client services — from working-capital to data-analytics — and target new African markets, according to CEO Daniel Yu.

Sokowatch also doesn’t rule out using its infrastructure to someday enter business-to-consumer online retail.

For the moment, the startup’s primary business focus is to reduce costs and increase profit margins for small merchants.

“We’re looking to build out the largest B2B e-commerce network across Africa,” Yu told TechCrunch on a call.

Informal retail is still king in Africa — even with the emergence of shopping malls and well-funded e-commerce ventures, such as Jumia.

The size and potential of the continent’s informal sector has captured the attention of economists and startups. GDP revisions in several African countries have revealed outdated statistical methods were missing billions of dollars in economic activity. And one estimate by The International Labor Organization places more than two-thirds of Sub-Saharan Africa’s non-agricultural employment in the informal economy.

On the number of shops in that space, a 2016 study by global consultancy PwC estimated 90% of sales in Africa’s major economies come through informal channels, such as markets and kiosks.

By Yu’s account, too many of Africa’s local merchants are sacrificing capital and incurring opportunity cost due to inefficient supply-chain.

Sokowatch is shifting that scenario, according to its CEO, and now serves over 15,000 small retailers across its operating areas.

“We…estimate that we save merchants at least 20% on supply-chain costs for the goods we supply,” said Yu.

Sokowatch AppSokowatch offers retailers an app to order products from its partner suppliers and maintains a fleet of vehicles, primarily three-wheel tuk tuks, for delivery.

“We handle all of our last-mile logistics exclusively ourselves,” said Yu.

The startup is also generating additional enterprise services. “As part of the product we are developing other tools for merchants to directly manage other aspects of their business, especially when it comes inventory and overall sales,” said Yu.

The data analytics Sokowatch creates for clients is also opening up working-capital solutions.

“We’ve been able to use that data to offer in-kind credit lines to many shops that can’t gain it from banks,” said Yu.

Quona Capital led Sokowatch’s $14 million Series A round, joined by Amplo, Breyer Capital, Vertex Ventures, Timon Capital and repeat investor 4DX Ventures.

Sokowatch Tuk TukThe startup joins other B2B oriented ventures that have drawn significant capital over the last 12 months.

Kenyan startup, and B2B food distributor, Twiga Foods raised $30 million in 2019 and announced it would expand to West Africa.

In August, Nigerian trucking logistics startup Kobo360 raised a $20 million Series A backed by Goldman Sachs. In November, East African on-demand delivery venture Lori Systems hauled in $30 million supported by Chinese investors and another Kenyan logistics company, Sendy, raised $20 million this January backed by Toyota.

Sokowatch wouldn’t name which countries in Sub-Saharan Africa it’s eyeing for expansion. The company’s CEO did confirm the startup could someday use the advantages of its platform to offer 3PL services or sell online directly to consumers in Africa.

“It’s within the power of our networks to do so” said Yu. “At the end of the day, we want to be the channel — both digital as well as physical — for transforming access to goods and services for these communities.”

Solar based ISP startup Tizeti launches 4G LTE network in Nigeria

Nigerian internet service provider Tizeti has launched its first 4G LTE network.

The Y-Combinator backed startup — that uses solar powered towers to deliver net connectivity — has built its premier 4G capable tower in the city of Port Harcourt, where Tizeti will offer its first 4G and ISP services.

The company operates primarily in Lagos, Nigeria’s unofficial business capital, and expanded this year to Ghana. Port Harcourt is the fifth largest city in Nigeria located in River State, another commercial hotspot for the country.

Tizeti plans to take its model to additional West African countries in 2020, according to CEO and co-founder Kendall Ananyi.

“We leverage inexpensive wireless capacity and plummeting cost of solar panels to create a low capex and opex network of owned and operated towers,” Ananyi told TechCrunch.

“We’re able to offer customers unlimited internet at 30 to 50% the cost of traditional mobile data plans,” he said.

The price for a Tizeti unlimited plan is 9,500 Nigerian Naira per month, or around $26. The startup has 1.1 million unique users and packages internet services drawing on partnerships with West African broadband provider MainOne and Facebook’s Express Wi-Fi. 

On the addressable market for Tizeti after its latest move, “Not everyone’s gonna sign up but we know we have 20 million in Lagos and 1.8 million in Port Harcourt; so even if we get 10%, that it’s a huge number for us,” Ananyi said.

A lot of businesses and tech startups bank on Nigeria’s numbers, since it has both Africa’s largest economy and population, at 200 million.

Tizeti raised a $3 million Series A round in 2018 and has built a suite of internet driven products to capture market share. In addition to ISP services, it launched a Skype-like personal and business enterprise communications service — WiFCall.ng— in April 2019.

Tizeti WiFi CallTizeti could shift the connectivity equation in Africa’s key tech hubs, such as Nigeria, where high levels of startup formation and VC investment are still hindered by weak internet stats.

Though Africa (primarily Sub-Saharan Africa) still stands last in most global rankings for internet penetration (35 percent), the continent continues to register among the fastest connectivity growth in the world.

Sub-Saharan Africa countries with the highest number of internet users include Nigeria (123 million), Kenya (46 million) and South Africa (32 million).