SUMMARY

Sokowatch was founded with the goal of creating the largest e-commerce network of goods and services for informal retailers across emerging markets. Informal retailers in Africa face huge challenges around product availability, access to capital and data management. While focusing on the opportunity to reach the 10 million plus informal retailers across African cities selling over $175B of consumer goods every year, Sokowatch helps retailers solve these challenges by offering free on-demand delivery of products through a digitized ordering platform and subsequent access to credit based on order history.

Company Overview

CEO: Daniel Yu
Website: https://sokowatch.com/
Founded: 2016
Market: Kenya & Tanzania
Product: Logistics delivery solution with credit line
Sponsor: Quona Capital

Over the next six months, Sokowatch will receive $75,000 USD in grant capital and receive mentoring from its Catalyst Fund sponsoring investor, Quona Capital. The company will also work with BFA to identify specific advisory engagements towards strategic milestones and a growth trajectory.



THE Problem and Solution

In African cities alone, there are more than 10 million informal shops selling over $175B worth of goods every year. Despite their importance to local economies, these shops run out of stock of routine products due to the lack of direct distribution and working capital financing. Sokowatch’s mission is to address the needs of these shops by improving availability of everyday goods.

Sokowatch is an e-commerce platform that helps informal stores in emerging markets keep products in stock and access credit to grow their businesses. Sokowatch does this by allowing shopkeepers to order products at any time via SMS or mobile app for free same-day delivery to their stores. Based on ordering data, Sokowatch then automatically calculates and extends credit to stores to allow them to increase their purchase sizes and grow their businesses. Sokowatch currently supplies over 3000 stores across Kenya and Tanzania with annualized revenues of over $1.8M.
 

The Innovation

  • Offers on-demand ordering for store inventory and free delivery under two hours to a network of informal SME retailers in East Africa.
  • Sources products directly from large fast moving consumer goods (FMCG) manufacturers - receiving bulk orders on consignment.
  • Allows retailers to browse images and prices for products and agents to track current orders via an app, which is available offline.
  • Toll-free SMS can be used to request price list of goods.
  • Lends forward to the shops, based on their order and payments history, to purchase goods on in-kind credit.
  • Offers a bundle credit product with smartphone financing and product.

The Value Proposition

  • Offers on-demand ordering and free delivery for small to medium retailers’ store inventory.
  • Offers low cost credit lines to retailers for a flat fee of 2 percent (mark-up on order) and a five days payback period in-kind (on orders and delivery).
  • Strong in-person relationships with a network of merchants and access to alternative data (orders, payment history).

THE LEARNING AGENDA

Sokowatch is aligned with the CF learning agenda and could help answer the following questions within the Catalyst Fund’s learning agenda:

  • How can inclusive fintech companies develop customized credit lines and advertisements based on customer data?
  • How can inclusive Fintech companies leverage machine learning for predictive e-commerce and financing?