Dear Quartz Africa Members,
Larger retailers have struggled to compete with the African country’s myriad of small shops and stalls.For example, in Nigeria and Uganda, the informal retail sector represents 90% of retail price Or so-called Fast Moving Consumer Goods (FMCG). In a continent where distributing products is costly and complex, how do large manufacturers ensure their goods get to where customers can buy them?
A lack of data throughout the supply chain means that FMCG manufacturers struggle to inform sales strategies and expansion plans.In addition, poor infrastructure Product distribution is an expensive affair in many parts of Africa.
The situation is further complicated when considering the fast-growing third-party logistics market, which has a total revenue of $27.9 billion 2020. Smaller players, primarily individual truck owners and transporters, traditionally dominated Cargo transportation, compared with logistics companies, has the least safeguards.but Many startups are now innovating around different aspects of the supply chain, from financing to inventory management, warehousing and distribution.
Every supply chain player has a role to play in its transformation.The key to achieving this goal is to Increase infrastructure funding and adopt new technologies.
Please note that this is the penultimate issue of the Quartz Africa member newsletter you will receive. We value your membership. Check your inbox for guidance from the marketing team on next steps.
💡Opportunities: Africa’s supply chains have many gaps that startups can help fill – whether it’s in financing, inventory management, warehousing or distribution
🤔 Challenge: Poor infrastructure, fragmented markets and regulatory hurdles drive up operating costs for supply chain startups
🗺️Route map: Supply chain startups should develop products that solve the unique challenges faced by African manufacturers, traders and transporters
💰Stakeholders: manufacturers, startups, governments, regulators, financiers, traders and Distributor
90%: Share of Informal Retailers in Nigerian Retail Value
$27.9 billion: Total revenue of Africa’s third-party logistics industry in 2020
$100 billion: Africa’s infrastructure funding gap
80%: Share of jobs created by SMEs in Africa
51%: Share of African SMEs needing more cash than they can currently get
Headquarters: Dar es Salaam, Tanzania
Ramani started as a distribution platform with its own delivery fleet and has grown into a logistics software maker that helps distributors manage inventory, process payments and gain sales data insights. The Tanzanian company works with clients such as Coca-Cola, Dangote Group, Serengeti Breweries and Vivo Energy.
Ramani’s three co-founders — Iain Usiri, Calvin Usiri and Martin Kibet — have backgrounds in tech and finance and left their US careers three years ago to start a startup in Tanzania.
“We felt that if we were successful domestically, it would make more sense. So we took our savings, booked a one-way ticket, and started the journey,” CEO Iain, a former Salesforce product manager, told Quartz.
Ramani offers inventory management and purchasing software, as well as point-of-sale (POS) software and handheld POS devices. The biggest benefit that FMCG brands and distributors can derive from this service is instant access to sales and inventory data. FMCG brands and distributors can also use insights including heat maps – a visual display that lets you see at a glance where sales are highest and lowest – to identify opportunities to increase sales.
The company’s switch to software was due to their participation in the US startup accelerator Y Combinator, which allowed them to explore new models for the company.
After obtaining a central bank lending license in 2022, Ramani is now also offering loans to small businesses using its services to help them grow.although Inventory financing is an important part of Ramani $32 million in Series A funding However, in a funding round announced in November, Ian clarified that the company’s overall goal is to be a software-driven distribution engine.
A Conversation with Ramani CEO Iain Usiri
🤑 On why they introduced inventory financing:
“Micro-distributors are SMEs, and SMEs in Africa struggle to get financing from banks. They don’t have access to credit, so they need to buy things with the cash they have on hand, which makes it difficult for them to grow as demand grows.”
🏢 On more than just an inventory financing startup:
“What we’re building isn’t an inventory financing business. We’re digitizing independent third-party micro-distributors and building financial software.”
🚗 On how the pivot away from distribution affects Ramani:
“We are dealers ourselves…[and] It is displayed in our information or heatmaps showing where products are sold – we provide information Brands can use these to make decisions. “
Supply chain transactions to 👀
Nigerian B2B Business Startups All-round business announced a $15 million Pre-A round of financing A funding round in August 2022. OmniBiz connects FMCG manufacturers with retailers, enabling retailers to order items through the platform and get free shipping.
Sharia Moroccan B2B commerce startup, raised bridge financing to value the company in January $100 million. Founded in 2020, it allows retailers to order items and have them delivered to their stores. In August 2022, Chari also acquired Karny.ma, a mobile credit book app that enables retailers to manage the loans they extend to customers.
Cairo-based B2B commerce startup October 2022 Maximum AB closed $40 million Pre-Series B equity funding as it looks to expand in North Africa and the Middle East. The platform enables food and grocery retailers to easily access merchandise from different suppliers.
More from Quartz Africa
😃 More than half of Jumia’s deliveries are now made within 24 hours
🙌 One of Nigeria’s largest grocery distributors buys its Ghanaian equivalent
🤔 African e-commerce still has work to do
📱 Social commerce is becoming an important business model in Africa
📹 African diplomats broadcast live to Chinese consumers
🇲🇦 Morocco’s e-commerce boom outlasts lockdown
🛒 Why China-Africa e-commerce lags behind
🤝🏽 Why B2B is the key to unlocking the potential of e-commerce in Africa
This membership letter was prepared while listening “kuna kuna” Written by Vic West, Brandy Maina, Fathermoh, Savara and Thee Exit Band. 🇰🇪 . Have a great week!
—Martin Siele, Nairobi contributor
one thing 🤯
Informal retailers are among the largest lenders in Africa.In Kenya, the number of households borrowing from shopkeepers hit a 10-year high in 2019, with 29.7% Take credit from shopkeepers, mostly in the form of basic food and other necessities.