NAMIBIA – Jabu, a Namibian business-to-business e-commerce retail startup, has received US$15m in a Series A funding round led by Tiger Global.
Other investors who participated in the growth round include Box Group, Knollwood, D Global Ventures, Afore Capital, Oldslip and FJ Labs.
The funding which follows in quick succession to its US$3.2 million seed round, will deepen Jabu’s presence in Southern Africa and expand to new markets like Botswana and Eswatini later this year.
For many years, merchants who own small to medium-sized kiosks and shops across Africa have dealt with logistics issues when ordering their products from wholesalers and distributors.
Startups like JABU and several other retailtech firms such as Wasoko, TradeDepot, Omnibiz, MarketForce, MaxAB and Chari have made this process easier via apps and more efficient distribution channels.
With Jabu, merchants can order, stock and pay for their products via Jwallet and expect same-day delivery.
The company also provides data-driven services such as sales metrics and agent performances to FMCGs brands and banks via dashboards.
In January, it had over 6,000 merchants using its platform across Namibia, South Africa and Zambia. According to David Akinin, CEO of the company, that number has increased by 50% since then.
Other than expanding its footprint in the region, Jabu, seeks to be built around its Jwallet, the wallet system currently launched as a standalone product.
Jwallet allows merchants in Southern Africa to use their physical flows to offer cash withdrawals and deposit services for their customers.
This play is akin to agency banking, a branchless banking system in Nigeria and West Africa where human agents act as ATMs to offer financial services in remote areas. Chari offers an identical offering in Morocco.
“You can offer your end consumers the ability to withdraw and deposit money into their wallets and bank accounts through JABU,” said Akinin.
“So we’re connecting an API to banks into the interchange, literally to allow someone who received money via the wallet to walk up to a JABU merchant who can use their physical float and withdraw money.”
Jwallet can also be used to access asset finance and stock financing, providing a more sustainable alternative to the popular BNPL model that other platforms are offering to merchants.
“I think buy now, pay later is an optical illusion. I think there is credit, and there are cash sales, and there’s nothing in between,” Akinin said in an interview with Techcrunch.
“So, I think BNPL is going to worsen the situation for small businesses, it’s going to create more defaults, generate a culture of bad pay, and it’s going to create real debt at the SME level in Africa, that will be hard to justify.”
His bias comes from experiencing defaults when JABU tried the BNPL model in the past.
Jwallet circumvents this by partnering with banks to carry out digital payments and creating communities for merchants to save and provide credit lines for each other on the platform.
This process also helps merchants build up their transaction histories while they make enough revenue — from providing financial services to end customers — to pay back.