Betastore secures $2.5M to solve stock-outs and funding challenges for informal retailers in West and Central Africa – TechCrunch
About 80% of household retail in Sub-Saharan Africa is delivered through informal channels, which constantly face several challenges such as stock-outs, leading to income instability and lack of attractiveness for financiers. These challenges affect millions of micro-retailers across the continent, and Betastorea B2B retail marketplace for informal retailers, is working to solve in Nigeria, Ivory Coast and Senegal.
The Betastore Marketplace allows informal merchants to source Fast Moving Consumer Goods (FMCG) directly from manufacturers or distributors – keeping product prices competitive by eliminating interactions with sales agents. It also works with logistics partners to ensure delivery of goods within 24 hours.
The Nigeria-based startup plans to provide these services beyond its current three markets by expanding into Ghana, the Democratic Republic of Congo and Cameroon by the end of this year, having closed 2.5 million dollars in pre-Series A funding from 500 Global, VestedWorld, and Loyal VC. Betastore has raised $3 million in funding to date.
“What’s really important to us is being able to continue to scale by leveraging our asset-light model. We plan to enter new markets before the end of the year and expand to 100 cities across Nigeria, Ivory Coast and Senegal. We also plan to strengthen our technology and leadership teams, introduce new products and improve existing ones,” said Betastore CEO, Steve Dakayi-Kamgawho co-founded the startup with Leo-Armel Tchoudjang mid 2020.
The asset-light model means that Betastore does not have capital and labor intensive assets like warehouses or its own fleet of vehicles for delivery. Dakayi-Kamga said this has helped the startup optimize its technology to ensure retailers are sourcing from the nearest distributors. On average, a merchant using Betastore places 4.4 orders per month.
“Our technology allows retailers to order on demand, access a variety of products and solve logistics problems for them too. With Betastore, they don’t have to close their stores to pick up goods from distributors or the market, and they don’t have to lose almost half of the logistics margins,” said Dakayi-Kamga, who worked previously for Jumia, where he led the logistics, warehousing and market execution department of the e-commerce platform.
The B2B e-commerce platform is set to introduce funding in July, a launch that follows a pilot program involving 200 retailers that the startup conducted last year.
BNPL’s funding strategy, Tchoudjang says, will be based on retailers’ sales and will go a long way in helping them grow the value of their shopping baskets and ultimately their businesses. The startup plans to charge interest based on product margins.
Betastore is currently integrating its technology into a network of financial partners including fintechs and banks.
“The mandate of some of the partners we have on board is to support the economy by financing small businesses, but they are unable to lend to them because they do not have the data to inform decisions. We have the visibility of what’s happening in this industry and have data they can use to expand funding,” said Tchoudjang, who previously held management and executive positions at network-backed AccessHolding AG. IFC in Africa. He has also helped multinational corporations deploy fintech and microfinance products for emerging markets in the past.
Retailers use the Betastore wallet to repay loans, deposit money for their operations, and send, receive, and save money.
“The wallet helps them separate their business money from their own money, and it’s directly connected to the entire banking system, which means retailers can receive and send money to any bank, and load money with any agency banking platform,” Tchoudjang said.
Since its launch, the startup claims to have increased its customer base and revenue by 10 and 12 times, respectively. The startup foresees greater growth, especially after entering more countries and rolling out its buy now, pay later (BNPL) product as it taps into the retail market in sub-Saharan Africa, which was valued at $380 billion. in 2021, contributing 20-50% of the region’s GDP on average.
“We want to simplify access to goods and services for merchants and for the end consumer because we consider the merchant as an agent capable of facilitating access to goods and services. We started in Nigeria and are growing in Francophone Africa to become a pan-African player,” said Dakayi-Kamga.
Amit Bhatti, Director of 500 Global, commenting on the latest funding round, said, “We believe the talented team at Betastore is creating market efficiencies that have the potential to drive growth for African retailers. With Betastore, merchants can gain greater transparency into wholesaler inventories and pricing. »