Jabu gets another N$235 million boost

NAMIBIAN logistics and distribution start-up, Jabu Logistics, has raised another N$235 million (US$15 million), a celebrated win for the company which has grown exponentially in just one year of operations.

The funds were raised from international financier, Tiger Global, and will see to it that the company, which now has operations in Zambia, scales up further.

According to Tech Guru, an online media platform, the round of funding which ended in March, saw Jabu Logistics crowned the recipient of US$15 million, just two odd months after receiving U$3,2 million in funding in a seed round from AforeCapital, Y Combinator, FJ Labs, Quiet Capital, Kli Capital, Pareto Capital and other angel investors.

Jabu’s chief executive David Akinin, who also attended this year’s World Economic Forum, said this funding will see Jabu deepening its presence in southern Africa, and expanding to new markets like Botswana and Eswatini later this year.

Akinin said what differentiates his start-up from others is how it is creating a much broader ecosystem for small businesses, rather than just a marketplace.

“Many businesses like ours are taking money out of the market. We’re trying to build a business that brings products into the market and continues in a journey that has a multiplier effect of moving that money 20 times around that market,” he said.

For many years, merchants who own small to medium-sized kiosks and shops across Africa have dealt with logistics issues when ordering their products from wholesalers and distributors.

Start-ups like Jabu and several others such as Wasoko, TradeDepot, Omnibiz, MarketForce, MaxAB and Chari have made this process easier via apps and more efficient distribution channels.

According to Tech Guru, with Jabu merchants can order stock and pay for their products via Jwallet and expect same-day delivery.

In January, the company had over 6 000 merchants using its platform across Namibia, South Africa and Zambia, and Akinin said that number has increased by 50%.

The company also provides data-driven services, such as sales metrics and agent performances to brands and banks via dashboards.

In the end, Akinin said Jabu wants to build around its Jwallet, the wallet system currently launched as a standalone product.

Jwallet allows merchants in southern Africa to use their physical flows to offer cash withdrawals and deposit services for their customers.

This play is akin to agency banking, a branchless banking system in Nigeria and west Africa, where human agents act as ATMs to offer financial services in remote areas.

“You can offer your end consumers the ability to withdraw and deposit money into their wallets and bank accounts through Jabu. So we’re connecting an API to banks into the interchange, literally to allow someone who received money via the wallet to walk up to a Jabu merchant who can use their physical float and withdraw money,” he said.

According to the company, drivers who handle distribution for its 232 logistics partners and use the wallet for payments can access asset finance and, for merchants: stock financing.

More on the latter, Akinin said he’s betting that the wallet system can provide a more sustainable alternative to the popular Book Now Pay Later (BNPL) model that other platforms are offering to merchants.

“I think buy now, pay later is an optical illusion. I think there is credit, and there are cash sales, and there’s nothing in between. So, I think it [BNPL] is going to worsen the situation for small businesses, it’s going to create more defaults, generate a culture of bad pay, and it’s going to create real debt at the SME level in Africa, that will be hard to justify,” he said.

Start-Up Namibia’s Jesaya Hano-Oshike said his team was also advocating that Namibian start-ups be considered for funding on an international platform.

“Namibia is not considered a legitimate destination for start-up funding, but we are working hard to change that narrative. In general, capital is available, what is missing is early stage risk capital to take a business from 0 to 1. In other words, from having a prototype to being able to enter the market,” he said.

Akinin moved to Namibia from Venezuela in 2014 and founded Atenu to build affordable housing and schools around the country, and now runs a growing million-dollar e-commerce business.

Email: bottomoline@namibian.com.na