About 80% of household retail in sub-Saharan Africa is delivered through informal channels, which are constantly faced with various challenges, such as stockouts, leading to income instability and a lack of attractiveness to financiers. These challenges affect millions of micro-retailers across the continent, and Betastore, a B2B retail marketplace for casual retailers, is working on a solution in Nigeria, Ivory Coast and Senegal.
The Betastore marketplace allows informal traders to source fast moving consumer goods (FMCGs) directly from manufacturers or distributors – keeping the prices of the products competitive by eliminating interaction with sales agents. It also works with logistics partners to ensure delivery of goods within 24 hours.
The Nigeria-based startup plans to offer these services beyond its current three markets by expanding into Ghana, the Democratic Republic of the Congo and Cameroon by the end of this year, after closing $2.5 million in pre Series A funding from 500 Global, VestedWorld, and stalwart VC. Betastore has raised $3 million in funding to date.
“What’s really important to us is to be able to continue to scale by leveraging our asset-light model. We plan to enter new markets and expand to 100 cities in Nigeria, Ivory Coast and Senegal before the end of the year. We also plan to strengthen our technology and leadership teams and to bring in new products and improve existing ones,” said Steve Dakayi-Kamga, CEO of Betastore, who co-founded the startup with Leo-Armel Tchoudjang in mid-2020.
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The asset-light model means that Betastore does not have capital and labour-intensive assets, such as warehouses or its own fleet for delivery. Dakayi-Kamga said this has helped the startup optimize its technology to ensure retailers source goods from the nearest distributors. A retailer using Betastore places an average of 4.4 orders per month.
“Our technology enables retailers to order on-demand, access a variety of products and also solve logistical problems for them. With Betastore, they don’t have to close their stores to get goods from distributors or the market, and they don’t have to lose almost half of the margins in logistics,” said Dakayi-Kamga, who previously worked for Jumia, where he led the logistics, warehousing and marketplace fulfillment department of the e-commerce platform.
The B2B ecommerce platform will introduce funding in July, a launch following a 200-retailer pilot program the startup conducted last year.
BNPL’s financing strategy, says Tchoudjang, will be based on retailers’ sales and will significantly help them grow the value of their shopping baskets and ultimately their business. The startup plans to charge 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 they can’t lend them because they don’t have the data to make decisions. We have insight into what’s happening in this sector and have data that they can use to expand funding,” said Tchoudjang, who previously held executive and leadership roles within the IFC-backed AccessHolding AG network in Africa. He has also helped multinational companies roll out fintech and microfinance products for emerging markets in the past.
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Retailers use the Betastore wallet to repay loans, deposit funds for their operations, and send, receive, and save money.
“The wallet helps them separate their business money from their own money, and it is directly connected to the entire banking system, meaning retailers can receive and send money to any bank, as well as load cash 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 expects greater growth, especially after entering more countries and rolling out its Buy Now Pay Later (BNPL) product as it taps into the sub-Saharan retail market, valued at $380 billion in 2021, well for 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 who can make access to goods and services easier. We started in Nigeria and are expanding in Francophone Africa on our way to becoming a pan-African player,” says Dakayi-Kamga.
Commenting on the latest funding round, Amit Bhatti, the director of 500 Global, said: “We believe Betastore’s talented team is creating market efficiencies that can drive growth for African retailers. With Betastore, merchants can gain greater transparency into wholesale stocks and price points.”