FinTech Collective Invests in Sabi
Published:
May 04, 2022
Author:
Sarah Parsons Wolter
Share:
We are very pleased to announce FinTech Collective’s investment in Sabi, a fifteen-month old, Lagos-based company creating massive efficiencies across the hyper-fragmented supply chain of Africa’s informal economy.
The informal economy is the economic driver in Africa, and in Nigeria alone represents 98% of all retail sales. To date, the suppliers and vendors in these markets operate through informal systems and processes. As transactions transition to digital, problems (but even more so, opportunities) proliferate. And as the shift away from storefronts has evolved, B2B marketplaces servicing the full supply chain, from manufacturer to merchant, have emerged.
Sabi traverses this complex network, bringing wholesalers, distributors, merchants, and agents together. What attracted us to Sabi’s approach was their focus on enabling much of the existing system of relationships - versus seeking to disintermediate any single player. The playbook is proving successful, and Sabi has already processed $280 hundred million of transaction volume across nearly 200 thousand partners in the short fifteen months since their launch.
We are very happy to have FinTech Collective on board. As we grow out our embedded finance stack, their track record in Africa with Flutterwave and their experience growing fintech enterprises globally is very welcome towards helping us serve the market the right way. We look forward to working together to bring the most innovative and valuable products to our users.
Anu Adesolum, CEO - Sabi
FTC Summary
Since meeting the dynamic founders - Anu Adesolum (CEO) and Ademola “Demmy” Adesina (Corporate Development & Embedded Finance) - we have continued to track their speedy and steady journey scaling the business. We've been continually impressed by the thoughtfulness and sophistication with which they approach every aspect of their work.
Beyond the duo’s track record building another venture-scale company together, both have notable, complementary backgrounds. Anu led Jumia’s J-Force team across East and West Africa, while Demmy has worked across several financial firms including JPMorgan, Capricorn Investment Group, and the Sainsbury Family Office.
Over the past fifteen months, this team has moved quickly to platform Africa’s informal supply chain. They’ve developed an asset-light flywheel inclusive of sales and fulfillment services, ERP software, and embedded credit.
Investments in B2B marketplaces in emerging markets have proliferated over the past year, but beyond the headline description, Sabi’s solution is unique. In augmenting rather than disintermediating supply chains, Sabi has acknowledged that the presence of middlemen such as wholesalers, agents and distributors is here to stay. In turn, they reap the benefits of working with higher value stakeholders with increased average order values and a more durable customer base. Rather than rebuilding the ecosystem, Sabi is focused on making inefficient systems more functional, and in turn profitable, for all users.
As a result, Sabi’s business model is more conducive to higher margins and less friction to scale. With pan-African ambitions and near-term plans to expand operations within Nigeria, Kenya, and South Africa, Sabi is poised to become a market leader across the continent, already on track to outpace the market’s most established competitors this year.
FinTech Collective’s interest in this space is rooted in the opportunity to address informal merchants’ primary pain points. By reducing indirect sales among middlemen, eliminating travel times to disparate market hubs, and establishing procurement certainty, digital transactions can unlock synergies among the massive informal market.
Winning companies will leverage their proximity to customers via these “wedges” to collect granular data on buyers’ and sellers’ day-to-day activities. Constructing the most accurate customer risk profiles and subsequently layering in embedded finance not only drives profitability, but also increases users’ purchasing power, sales potential, and overall stickiness.
We are thrilled to support the Sabi team as a board observer as they continue to access hard-to-reach markets and platform informal supply chains across the continent.