Enabling E-Commerce Across Africa with Daniel Yu, Founder/CEO of Sokowatch
In this episode of the Wharton Fintech podcast, Miguel Armaza is joined by Daniel Yu, Founder and CEO of Sokowatch, a B2B e-commerce platform with integrated financial services and logistics transforming access to essential goods for communities across Africa. With operations across Kenya, Tanzania, Rwanda, and Uganda, Sokowatch provides free same-day delivery of essential goods to over 16,000 informal retail shops as well as additional services to help them grow.
Originally from California, Daniel Yu has been interested in Technology and International Business ever since he can remember. Wanting to fulfill his desire to travel around the world and learn new languages, he attended the University of Chicago to study International Studies and Linguistics. His academic program led him to Egypt, where he spent several months studying Arabic and Egyptian culture. It was also during this time that he would come up with the business idea that became Sokowatch. The concept was simple: enable shopkeepers to manage their orders and connect with suppliers via cellphone text messaging. He was so excited about this venture, that he eventually dropped out of University and moved to Nairobi, Kenya to build the first pilot.
From E-Commerce to Fintech
Daniel chose Kenya because he had been approached by several local organizations interested in building out this technology. After assembling a small initial team, he launched the first version of the product. Their model was to act as brokers between shopkeepers and suppliers, but Daniel and his team quickly realized that connecting the two wasn’t enough and they needed to solve several problems across the supply chain to actually fulfil orders on time and add value. So they decided to expand their business model and deliver the products themselves. A few years later, Sokowatch has become a full-stack, fully integrated E-commerce company with the ability to deliver basic services to shopkeepers in an average of two hours. They serve about 15,000 shops in four different countries, across nine cities in East Africa, who rely and order from Sokowatch on an active basis.
Sokowatch has a very close relationship with the shops they serve. Being their key supplier, they have visibility into a client’s sales volumes, store activity, and financing needs. This is why in 2019 they launched a financing program to extend credit lines to shops. The product has been a gamechanger for clients as they are traditionally unbanked businesses with little access to credit. The shops under their credit program have doubled order volumes with Sokowatch and increased sales volumes. On the back of this financing, Sokowatch is also offering other financial services with affordable payment plans and is now experimenting rolling out insurance products.
COVID Response
The COVID-19 crisis presented a challenging situation for Sokowatch. As a provider of basic goods and services, the business has continued to grow and thrive. However, the crisis has been particularly difficult for the communities they serve, where consumers are especially vulnerable and the government offers little to no safety nets. As a result, Daniel and team have partnered with multiple organizations that work with households in need to create a digital voucher program that provides codes for $15 of essential goods via text directly to consumers. This structure allows them to help directly the people in need, cuts red tape and corruption, and helps local shops with much-needed business.
Going forward, we can expect Sokowatch to continue expanding across East Africa and the rest of the African continent. COVID has curved these plans a bit, but it won’t stop Daniel from fulfilling his vision of establishing Sokowatch as the number one provider of goods and services for informal businesses across Africa.
Daniel Yu is the founder and Global CEO of Sokowatch. Prior to founding Sokowatch, Daniel worked as a software developer for several early-stage startups in the US and attended the University of Chicago where he focused on International Studies and Linguistics before dropping out. Through his work with Sokowatch, Daniel has received international recognition as the winner of the Prince of Wales Young Entrepreneur Prize, designation by the White House as an Emerging Global Entrepreneur, and as one of Forbes 30 Under 30 Social Entrepreneurs. Daniel has worked in or traveled to 60+ countries and speaks Mandarin, Swahili, Portuguese, Spanish, Arabic, Cantonese, and French.
Sokowatch, a B2B e-commerce platform with integrated financial services and logistics transforming access to essential goods for communities across Africa. With operations across Kenya, Tanzania, Rwanda, and Uganda, Sokowatch provides free same-day delivery of essential goods to over 16,000 informal retail shops as well as additional services to help them grow.
