SokoWatch is Reinventing Informal Retail Across Africa

In most African cities, more than 10 million informal shops sell over $180 billion worth of goods every year. However, despite their importance to local economies, these shops routinely stock out of products, have limited access to financial services and lack proper business management tools. The aim of Sokowatch a startup founded by Daniel Yu in 2013, is to transform communities across Africa by revolutionizing access to essential goods and services.

Sokowatch allows informal retailers to order products at anytime via SMS or mobile app, and free same-day delivery to their store. This makes it easier for shopkeepers to source goods and help manufacturers ensure that their products are consistently available to consumers.

The startup primarily generates revenue by taking a cut off the savings it makes for clients by aggregating orders for independent retailers and negotiating better prices from suppliers. Also, it collects plenty of proprietary client data and use that to offer lines of credit and other financial services.

Sokowatch has experienced a quite strong growth, an attribute which it still enjoys, accompanied with a massive expansion across East Africa. It was able to raise $2.5m funding on top of the $2 million funding it received a year earlier, which spurred the startup to be expanded to Rwanda and Uganda. Since 2016, it has delivered 500,000 orders to over 10,000 retailers in Kenya and Tanzania. A source familiar with Sokowatch says its ‘rapid growth’ means there’s a good chance it will raise for Series A before the end of the year.

Also, the startup developed a business-to-business (B2B) e-commerce supply chains for retailers in Africa’s informal markets to work more efficiently with large FMCG suppliers including Unilever and Procter & Gamble.

For them, “focusing on developing effective technology, logistics and financing for 10,000 small shops instead of the one million individual consumers who buy from those shops represents the same combined business opportunity but at a fraction of the complexity” said Danie Yu, the startup’s founder.