With the Lagos startup ecosystem valued at more than $6 billion, attracting almost $1 billion in FDI annually, e-Commerce Platforms and FinTechs are showing their prospect of becoming the pivot of Nigeria’s economy.
Giving fillip to this is the completion of a $1.8 million seed round from foreign investors, including 4DX Ventures, Enza Capital, FJLabs and Golden Palm Investments, early this week by Sendbox, the Nigeria-based e-commerce platform for merchants in Africa.
The effort, the company said, will open up new online markets for small and medium enterprises (SMEs), including merchants across Africa.
Sendbox said the fund would be used to further digitise deliveries for African SMEs, and to build out West Africa’s e-commerce operating system.
Sendbox, which announced the new funding in a statement said with participation from Flexport and YC Combinator as part of its 2021 winter cohort, Sendbox’s total investment raised has now reached $2 million, following a pre-seed round from Microtraction and 4DX Ventures in 2018.
The funding, it stressed, will be used to expand the company’s operations in countries across West Africa, bolster the development of its product range, and hire new talent, the company further explained in its statement.
Commenting on Sendbox’s fundraise and growth ambitions, its CEO and Co-founder, Emotu Balogun, said: “No matter where in the world customers are, we want African SMEs to be able to reach them. Deliveries in Lagos, Abuja, Port Harcourt and Ibadan have made up a large proportion of business for our domestic merchants. On top of that, affordable access to the UK, EU, US and Canada has created an opportunity to sell products to hundreds of millions of previously unreachable buyers. With this fundraise our aim is to support more and more SMEs and help them grow both locally and internationally, scaling alongside them as we connect African merchants with a global community of consumers.”
According to Balogun, “Starting with logistics and fulfilment, Sendbox is building the operating system for e-commerce in Africa. Launched in 2018, the company provides affordable access to local and international delivery options for small-scale merchants selling on e-commerce and social media platforms.
“Accessible to iOS and Android users, via web application, on Whatsapp, Facebook, Instagram and other e-commerce platforms, and through developer APIs, Sendbox is providing a single location to manage both local deliveries and international shipments to the EU, UK, US and Canada. To date, over 10,000 Nigerian SMEs have sent 200,000 products through Sendbox, saving on average 30-40 per cent per item by eliminating the need to work with separate logistics providers.”
Co-founder and General Partner at 4DX Ventures, Walter Baddoo, said: “African e-commerce is accelerating faster than anybody could have imagined a decade ago and it needs smart solutions to ensure that logistics and fulfilment capacity doesn’t lag behind. Not only were we impressed by Sendbox’s 300 per cent year-on-year growth since launch, but we are also seeing the market potential balloon with over 40 million Nigerian SMEs and a projected industry value for social and e-commerce reaching $45 billion on the continent by 2025.”
According to the statement, through its delivery management platform, which aggregates logistics providers and enables tracking, Sendbox also offers a solution for merchants who lack the high volumes required to attract discounted delivery fees. The next stage of the company’s growth will see a move towards financing and payments, followed by e-commerce and marketplace integrations across West Africa.
The statement added: “Prolific mobile penetration on the African continent, the rise of social media and knock-on impacts from the COVID-19 pandemic, have shifted additional momentum towards e-commerce and social commerce, doubling monthly revenues for Sendbox since March 2020. Made-in-Africa products are now in higher demand across local and international markets. With 200 million Instagram users and one million Instagram businesses in Nigeria alone, Sendbox is well positioned to serve this growing market and multiply its merchant count over the coming months.”