Betastore gets $2.5M to solve stock-outs, financing 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 perennially face several challenges like stockouts, leading to an instability in earnings, and a lack of attractiveness to financiers. These challenges befall millions of micro-retailers across the continent, and Betastore, a B2B retail marketplace for informal retailers, is working to resolve in Nigeria, Ivory Coast and Senegal.
The Betastore marketplace enables informal traders to source fast moving consumer goods (FMCGs) directly from manufacturers or distributors – which keeps the prices of the products competitive by eliminating interactions with sales agents. It also works with logistics partners to ensure the delivery of goods within 24 hours.
The Nigeria-based startup plans to provide these services beyond its current three markets by expanding to Ghana, the Democratic Republic of Congo and Cameroon by the end of this year, after closing $2.5 million in pre-series A funding from 500 Global, VestedWorld, and Loyal VC. Betastore has to date raised $3 million in funding.
“What is really important for us is to be able to continue to scale by leveraging our asset-light model. We plan to enter new markets before the end of the year and to expand to 100 cities across Nigeria, Ivory Coast and Senegal. We are also planning to reinforce our technology and leadership teams, and to bring in new products and to improve existing ones,” said Betastore CEO, Steve Dakayi-Kamga, who co-founded the startup with Leo-Armel Tchoudjang mid 2020.
The asset-light model means Betastore does not have any capital and labor intensive assets like warehouses or its own fleet of vehicles for delivery. Dakayi-Kamga said that this has helped the startup to optimize its technology to ensure that retailers source goods from the closest distributors. On average, a retailer using Betastore makes 4.4 orders per month.
“Our technology enables retailers to order on demand, access a variety of products and solves logistics headaches for them too. With Betastore, they don’t have to close their shops to go get goods from distributors stores or the market, and do not have to lose close to half of the margins in in the logistics,” said Dakayi-Kamga, who previously worked for Jumia, where he led the e-commerce platform’s logistics, warehousing and marketplace fulfillment department.
The B2B ecommerce platform is set to introduce financing in July, a launch that follows a pilot program involving 200 retailers that the startup carried out last year.
The BNPL financing strategy, Tchoudjang says, will be based on retailers’ sales and will go a long way in helping them to grow the value of their shopping baskets, and ultimately their businesses. The startup plans to charge an interest based on product margins.
Betastore is currently integrating its technology into a network of financing 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 are not able to lend to them because they do not have the data to inform decisions. We have the visibility of what is happening in this sector, and have data they can use to extend financing,” said Tchoudjang, who previously held executive and leadership roles within the IFC-backed AccessHolding AG network in Africa. He has also helped multinationals rollout fintech and microfinance products for emerging markets in the past.
Retailers use the Betastore wallet to repay loans, deposit money for their operations, and to send, receive and save money.
“The wallet helps them separate their business money from their own money, and it is directly connected to the whole banking system, meaning that retailers can receive and send money to any bank, and load cash with any agency banking platform,” said Tchoudjang.
Since launch, the startup claims to have grown its customer base and revenues by 10 and 12 times, respectively. The startup anticipates greater growth especially after entering more countries and rolling out its buy now pay later (BNPL) product, as it taps the retail market in sub-Saharan, 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 the retailers and for the end consumer because we see the merchant as an agent able to make access to goods and services easier. We started out in Nigeria, and we are expanding within Francophone Africa on our way to being a pan African player,” said Dakayi-Kamga.
Amit Bhatti, the principal at 500 Global while commenting on the latest funding round said, “We believe Betastore’s talented team is creating market efficiencies that have the potential to boost the growth of Africa’s retailers. With Betastore, merchants can get greater transparency into wholesaler inventories and price points.”