Sabi, the Lagos-based B2B e-commerce startup, is defying industry contractions and gaining momentum in Africa's informal trade sector. The company's unique operational model, targeting a wide range of merchants dealing with FMCG goods, agriculture, electronics, and chemicals, has allowed it to outperforåm its competitors.
Unlike other B2B e-commerce platforms that either own or lease facilities in their distribution chains, Sabi takes an asset-light approach. It acts as an intermediary, connecting manufacturers, distributors, wholesalers, and retailers, whom they collectively refer to as merchants. Through a network of offline agents, call centers, merchant partners, and supplier centers, Sabi provides channels for these stakeholders to interact and conduct business efficiently.
Sabi's growth model and emphasis on fundamental business principles, profitability, and sustainable unit economics have distinguished it from other startups in the sector. While many of its competitors have faced challenges amid rising global interest rates and the evaporation of free money, Sabi has maintained a sustainable trajectory. Its adaptability and responsiveness to market dynamics have allowed the company to navigate and thrive in challenging conditions.
The primary revenue sources for Sabi remain consistent. The company captures a 5-6% take rate on marketplace transactions and earns a financing margin on credit-related transactions that it facilitates. Notably, Sabi has already facilitated over $100 million on behalf of local microfinance banks and fintech lenders, which has attracted the interest of fintech-focused investor CommerzVentures.
With an average of 15,000 monthly orders and over 20% month-on-month growth, Sabi is positioning itself for further expansion. While the number of monthly orders is lower than that of its competitors, such as Wasoko, Sabi's higher GMV suggests that it generates higher average order values, primarily from wholesalers. To accommodate additional revenue models and focus on the B2B payments value chain, the startup is launching new products and features targeting its agents and last-mile merchants.
Looking ahead, Sabi has ambitious plans for expansion into new markets. It is considering entry into Tanzania and Malawi through acquisitions, as well as targeting the Democratic Republic of the Congo (DRC) and Francophone West Africa. The company's goal is to establish a presence in key African markets and consolidate its position as a leading provider of digital commerce infrastructure to the informal economy.
Sabi's latest funding round, coupled with its impressive growth numbers and sustainable business approach, demonstrates its potential to transform Africa's B2B e-commerce landscape. As the company expands its operations and introduces new features, it aims to strengthen its position as a vital platform connecting Africa's informal retailers to manufacturers and wholesalers, driving economic growth and innovation in the region's retail market.
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