In business, comparisons and generalizations are common and useful, but sometimes they ignore complexities. So with those generalizations aside, here’s how to think about Sabi, a Norskenn-22-backed startup valued at $300 million in 2023: it’s in the business of creating market intelligence that enables commerce.
While many B2B e-commerce companies focus mostly on retail distribution—a notoriously thin-margin business if ever there was one—Sabi serves manufacturers, distributors, retailers, and even farmers. It builds digital infrastructure for anyone involved in buying and selling.
Sabi provides everything that makes commerce seamless: payments, retail, logistics, and most importantly, market intelligence that can be the difference between success and failure. Market information and clear data points can be difficult to obtain in Africa, driving inefficiencies for several players in the value chain.
For instance, a distributor’s inventory management becomes easier if they can know with a high degree of accuracy, each retailer within a given market and the frequency of their orders. Such seemingly simple data points can be difficult in a market where one retailer or agent can act as an aggregator for several other retailers, obscuring granular information to make just-in-time inventory management possible.
The complexity of Sabi’s model and its goal of collecting actionable intelligence on all players in the value chain means that it’s a platform and a marketplace. The company’s revenue is from a take rate on marketplace transactions and a margin on credit-related transactions.
“Sabi has become, over the last three years, one of Africa’s largest and most important e-commerce companies,” said Ademola Adesina, one of the company’s co-founders. Rarely in the news, the company grabbed the public’s attention when it hit $1 billion in 2023 Gross Merchandise Value (GMV).
This month, the business will celebrate its third anniversary.
Founded in 2021 by Ademola Adesina and Anu Adedoyin Adasolum, Sabi has grown exponentially in three years. It has 250,000 registered users, facilitates 15,000 monthly orders, and in 2023 nearly tripled its revenues on an annualized basis from 2022. Most of that growth has come from Nigeria, its primary market. The company is also present in South Africa, and hopes to replicate this success in new markets like Tanzania and Senegal.
“Our key differentiators are our product design and our focus on aligning incentives across the value chain. We are a partner to our users and we deliver for our merchants’ top and bottom lines,” Adasolum said.
The company operates in the fast-moving consumer goods (FMCG), agriculture, and minerals sectors.
“We’ve never really felt any need to follow models, we do follow the market,” she added.
Despite the breadth of the company’s ambitions and offerings to players along the value chain, it is still asset-light. While being asset-light is often a buzzword, it makes sense once you understand that this is essentially a market intelligence play. It can keep warehousing partners in business by using intelligence to get them consistent order flow.
“We’re not trying to displace distributors. We’re platforming them, giving them the tools, the financing, the logistics, etc, to grow their businesses,” Adasolum said, highlighting their commitment to enabling commerce.
“Sabi has been helpful and supportive in terms of our ventures and our trade. Without them, we probably wouldn’t be in business,” said Sadiq Mohammed, the founder of K2 agricultural processing company for whom Sabi has facilitated close to N800 million in financing.
Facilitating trade beyond Africa
Sabi has also talked up its vision to facilitate trade beyond Africa. Through its digital platform, Technology Rails for African Commodity Exchange (TRACE), the company helps big manufacturers facilitate commodities exports from Africa to Asia, Europe, South America, and the USA.
“We’re one of the largest facilitators of exports from Nigeria to the rest of the world,” Adesina said.
At a time when the AfCFTA agreement is only in its first phase, tools like SABI’s TRACE are using technology to meet buyers and sellers at every point of need. The company believes that it will benefit greatly from the implementation of the free trade area project in terms of the discovery of buyers and sellers, facilitation of cross-border logistics, tracking, and financing.
With inflation and currency pressures in different markets, companies have been forced to close shop or cut costs. But Sabi sees this differently. The devaluation of the naira, while challenging, has also presented an opportunity for Nigerian exports. A weak naira makes Nigerian goods cheaper for international buyers and savvy businesses can capitalise on this opportunity to scale.
“What we’re good at is spotting that directional move on the macro level and supporting our businesses to monetise that opportunity.”
