Namibian e-commerce startup JABU has confirmed to TechCrunch that it has raised a $3.2 million funding round.
The initial round, which closed last year, welcomed investors such as Afore Capital, Y Combinator, FJ Labs, Quiet Capital, Kli Capital, Pareto Capital and unnamed angels.
As a last-mile distribution e-commerce company, JABU joins the list of startups across the continent helping small retailers to order and stock their products while, at the same time, providing data-driven services to suppliers and manufacturers.
CEO David Akinen established JABU in mid-2020 to fix the inefficient and nonexistent supply and distribution chain in Namibia.
Its platform connects more than 6,000 retailers with local and multinational suppliers – such as Namibia Breweries Limited, ABInBev, Bocomo, Coca-Cola, Namib Mills – and orders numbering, payments and logistics.
The Namibian startup has a fleet of vehicles along with eight distribution centers. Suppliers who use the platform have dashboards to see where their products are being delivered, check KPIs and promote books. They can also conduct in-store advertising and marketing campaigns, give product gifts and click in trade revenue.
JABU has operated in stealth mode for most of the past year. I entered Y Combinator during the summer batch of the accelerator in 2021, the first time for a startup in Namibia.
The startup does not appear on our curated list because it has postponed Demo Day until this year’s winter batch, bringing the number of African startups to 15 Owns picked by Y Combinator, according to some sources.
The past year has seen venture capital firms and institutional investors rush to support e-commerce-based startups related to B2B e-commerce. One of the oldest platforms in the space, Nigerian B2B e-commerce platform, TradeDepot, has raised $110 million in debt and equity.. Among the start-ups from other parts of Africa that have raised their investments are Morocco’s Shari, Egypt’s Capiter, Maxab, Twiga and Kenya’s Marketforce.
JABU highlights the Southern African region. The company operates in three cities in Namibia and recently expanded to two cities in Zambia. Monthly GMV grew 25 times the average growth of SKUs delivered Approximately 53% per month since March. The company said revenue has also seen a 35-fold growth over the same time frame.
As with most African countries, Namibia severely Rely on cash. And JABU — which benefits from owning its own supply chain — is making efforts to digitize physical cash collections across wallets..
When money from retailers arrives at JABU distribution centers, it Usually It takes 48 hours to settle in banks. Instead of going through this normal process, JABU wallets will allow traders to deposit and withdraw funds instantly in tandem with these centers.
“Our volume growth has grown a lot and we raised a lot of money in physical currency, and the banks etc sat down and said, ‘How can we fix this?? ‘ I mean, we’ve gone from owning a couple of 100,000 (rand) a week to owning millions of Namibian dollars. Akinin said about why the company created wallets for its merchants and we realized there was something better and bigger than what we originally used.
Akinin said the next phase of the JABU wallet system will see merchants offer other services to consumers in addition to their digital cash.
“The only way to do that is by partnering with merchants, and they go through [know your customer] process, we make sure merchants have the right space and the right account to support their flotation. And then they deal with their customers. So we are entering the B2B2C domain through the merchants we work with.”
JABU’s revenue largely comes from distribution it makes itself or via third-party fleets. Targeted commerce, marketing, and advertising also bring in dollars for the company. It will take commissions from transactions made on merchants wallets in the future.
Akinin, who had a stint at Google as a sales and commodities analyst, also spent parts of his career as an investment banker at Credit Suisse.. He later made a series of visits to the most important African cities such as Johannesburg, Lagos and Addis Ababa, but it was in Windhoek that he found the spark to try something new.
Namibia had a huge demand for housing at that time. Akinin launched a digital mortgage lending startup but focused on a construction company with a presence in Namibia, Zambia and Cameroon.
Due to the pandemic, construction company Akinin has embarked on a COVID relief program to donate food supplies in Namibia. After that, he stumbled upon the opportunity of e-retail business among businesses in the country.
We went to the informal sector and realized that the city closed all the informal retailers. And when they did, we had this software that we developed to love digitizing housing demand,” he said, describing how JABU started.
“we I hired 40 people from the community and in about a week or two we’ve registered 1,000 stores I was touched by This shutdown. We realized there was a huge opportunity here to not only help them reopen but understand something very important here that they don’t have a supply chain and also there is no way to get their products at affordable prices.”
Informal retail is still king in Africa. A study by PricewaterhouseCoopers reported that informal channels such as kiosks and convenience stores account for 90% of sales in Africa’s major economies.. The opportunity is so great that some startups, such as Nigerian B2B retail platform Sabi (a subsidiary of Rensource), said they process nearly $12 million per month GMV, TechCrunch learned in an interview with its founders in November.
Akinin told TechCrunch that JABU, with more than 200 employees, is preparing to raise Series A funds this quarter. The startup will use the initial round and later growth round To expand into Botswana and South Africa, grow its technology team and operations, and train its field agents.