B2B retail marketplace for informal retailers, Betastore, has received $2.5M Series A funding to solve stockouts financing challenges in central and west Africa.
Eliminating Sales Intermediaries in BetaStore Marketplace
Around 80% of household retail in Sub-Saharan Africa is delivered through informal channels, which are plagued by issues such as stockouts, resulting in earnings instability and a lack of appeal to lenders. Several micro retailers across Africa face these issues, which Betastore seeks to solve in Nigeria, Ivory Coast, and Senegal; it dominates while expanding to other markets.
By eliminating interactions with sales intermediaries, the Betastore marketplace, co-founded by Steve Dakayi-Kamga with Leo-Armel Tchoudjang in mid-2020, allows informal traders to source fast-moving consumer goods (FMCGs) directly from manufacturers or distributors, keeping product prices competitive. It also partners with logistics partners to ensure that goods are delivered within 24 hours.
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After raising $2.5 million in pre-series A funding from 500 Global, VestedWorld, and Loyal VC, the Nigeria-based startup intends to grow beyond its current three markets to Ghana, the Democratic Republic of Congo, and Cameroon before the winding of the year.
“What is really important for us is to continue to scale by leveraging our asset-light model. We plan to enter new markets before the end of the year and 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 the CEO, Steve Dakayi-Kamga.
Betastore’s asset-light model means it doesn’t have any capital or labor-intensive assets like warehouses or its own delivery fleet. This, according to Dakayi-Kamga, has helped the startup in optimizing its technology so that merchants may acquire goods from the closest distributors. A retailer that uses Betastore places 4.4 orders per month on average.
“Our technology enables retailers to order on demand, access a variety of products, and solve logistics headaches. With Betastore, they don’t have to close their shops to get goods from distributors stores or the market, and do not have to lose close to half of the margins in the logistics,” said Dakayi-Kamga.
Financing Small Businesses with BNPL
The B2B e-commerce 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, according to Tchoudjang, who previously worked for Jumia, where he led the e-commerce platform’s logistics, warehousing, and marketplace fulfillment department, 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.
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 its launch, the startup claims to have increased its customer base and revenue by ten and twelvefold, respectively. As it penetrates the $380 billion retail market in Sub-Saharan Africa, which contributes 20% – 50% of the region’s GDP on average, the startup anticipates more incredible growth, especially after entering more countries and rolling out its buy now, pay later (BNPL) product.
“We want to simplify access to goods and services for the retailers and the end consumer because we see the merchant as an agent able to make access to goods and services easier. We started in Nigeria, and we are expanding within Francophone Africa on our way to being a pan-African player,” said Dakayi-Kamga.
The principal at 500 Global, Amit Bhatti, 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.”
