Congratulations to VC4Africa member and DEMO Africa 2012 selected venture Soko (formerly SasaAfrica)! They raised US$ 700.000, in an early stage round of financing, from Dubai-based investment firm Rio Partners and other angel investors. Soko (‘marketplace’ in Swahili) has developed the first e-commerce marketplace that enables Africa’s talented artisans to post and sell their products online. We had a chance to catch up with Soko’s founders Ella Peinovich, Gwendolyn Floyd and Catherine Mahugu. “Participating in DEMO Africa was a monumental turning point for our company.”
Please tell us what has happened with Soko since DEMO Africa 2012?
“Since DEMO Africa 2012, Soko has grown from a successful scaled pilot to a viable business, connecting artisans in Kenya directly to thousands of consumers in the States. We have grown our team to a 12 strong international team, received accolades and awards from prestigious competitions like the ITU Telecom World Young Innovators Competition and BiD Network Women in Business Challenge, and most recently a USAID Development Innovation Venture grant, and have formalized strategic partnerships.
We are pleased to announce the financing partnership with Rio Partners, who discovered Soko through our participation in DEMO Africa 2012. They bring exceptional experience in growing digital businesses in Africa as well as mobile money systems development and implementation, international marketing, and online sales. We have now closed our Series Seed Round of financing and launched our public website!”
What was the single greatest challenges you faced to date and how did you overcome this?
“Perhaps it’s cliché for a start up to say it, but during the first 1.5 years of operations there was so much to do, so little time, and not enough money!!! Our major win, and what helped us achieve ambitious goals and milestones was being open to feedback, support, and help from a large network of expert communities. We’ve had multiple Silicon Valley technologists come work for us for free, marketing experts load their time and team, fellows travelling from afar to document artisans, consumers giving copious rich feedback as well as peer advertising on our behalf, advisors lending their company resources and more. Looking back the key was asking for help and not pretending that we could do it all alone.”
What are the key challenges you will need to overcome moving forward?
“We have created a robust and exciting mobile to web e-commerce platform. We are both a technology and a retail company. Up until recently, the focus of our business has been largely on developing and optimizing the backend and mobile technologies. We are now shifting our focus to connecting our two markets, mobile enabled artisans and online consumers, through an optimized e-commerce experience, high impact marketing, community management, and consumer and trend feedback for artisans. Online retail is a highly competitive space. Although our unique value propositions and offerings position us well, our main upcoming challenge will be to develop an online consumer facing strategy that will enable us to capture enough market share to not just be sustainable, but highly profitable. We have built an amazing marketing team with experience in retail and branding that are doing an impressive job of tackling this exciting challenge.”
What are your further fundraising plans?
“While we aim to have a cash flow positive business in 2014, we anticipate that we will begin Series A fundraising toward the end of this year to fast-track our high impact marketing campaign and geographic artisan expansion.”
What social and economic impact do you expect your venture will have?
“Our mission is to increase access to economic opportunity for small scale producers in the developing world to improve their livelihoods. Accessible tools for female entrepreneurs to support, grow, and formalize the micro, small and medium enterprises of Sub-Saharan Africa (SSA) is necessary to disrupt the pattern of poverty amongst women in SSA, allowing them to grow their businesses and enter the formal economy.
Soko recruits these small-scale producers as customers of our SMS business tools, granting them access to the international marketplace and increasing their earnings significantly. Moreover, our tools empower women to grow their businesses as formal entrepreneurs, gaining access to financial rights and representation through the use of the platform. As the vendor earns traceable income on the Soko platform, can be leveraged to access loans, open a bank account, and even register as an independent entity.”
How can you prove that your business will deliver?
“We are uniquely positioned in that our value propositions cater to a wide variety of consumer demographics, offering innovation in areas as diverse as mobile technology, e-commerce, fashion, women’s empowerment, disruptive business models, and financial services. This led to, even before Soko had launched or engaged in any direct marketing or outreach, thousands of potential customers signing up online to shop and join the Soko community. There is so much excitement and support for our business, it is up to us to take advantage of the opportunity by developing our business strategy as we scale in close tandem with what we learn from both sides of our market. It’s an exciting task and we believe our technology, marketing, and operations teams, along with unbelievable and seasoned advisors, are the perfect people to ensure we succeed.”
How do you look back at you participation in DEMO Africa?
“Participating in DEMO Africa was a monumental turning point for our company. We launched our private beta in conjunction with the event, getting invaluable feedback and support from world-class industry experts and leading to dedicated mentorship from entrepreneurial stars such as Marieme Jamme. The network we were able to build with the pan-African community of entrepreneurs will help us as we expand to our next African markets. And, not only did we get introduced to our Series Seed investors directly as a result of DEMO Africa, but as one of the winners of the event we are excited to present at DEMO in Silicon Valley this Fall to support our Series A fundraising.”
What advice would you give to other ventures in the VC4Africa community?
“Learn from your context! Some of the most exciting businesses in the world are coming out of Africa right now. The mobile ecosystem, rapidly developing economy, and demand for smart disruptive services is unparalleled anywhere else right now. Keep this in mind and stay focused on the opportunities at hand rather than being too influenced by what is going on in the big tech markets of Silicon Valley, EU, and Asia. If you are an entrepreneur, innovator, or technologist, you are extremely lucky to be in Africa!”
What role do you see the VC4Africa community playing?
“The VC4Africa community is on the vanguard of promoting and capitalizing off of the incredible innovation and entrepreneurship found across Africa. To us, this focus on the continent’s human and technological capital, too often overlooked by traditional VC’s, makes this community true innovators in the global VC community.
Please spread the word about Soko! The exposure that VC4Africa members have to press, consumers, and the VC ecosystem is invaluable endorsement and support from a network we admire and are proud to be a part of. As a company we are representing African innovation and design at a global level.”
Inspired to raise capital? Apply now for VC4Africa’s June 2013 Cohort, the opportunity for Africa’s most promising entrepreneurs to raise funds (application closes next week, Wednesday June 12th!). And over the next 2 months you can also apply to be a part of DEMO Africa 2013!