Wasoko is the most valuable tech startup in East Africa. Zanzibar is using it as an anchor company to make the island the next place for tech talent and innovation in Africa.
Zanzibar is hoping that more investors will be interested in business-to-business (B2B) e-commerce startups in Africa to get funding and tech talent and become known as a tech hub on an island.
Wasoko, a B2B e-commerce platform that connects informal retailers to consumer goods manufacturers previously headquartered in Kenya, has been chosen as its first anchor company and official “private ambassador.”
The semi-autonomous group of islands located off the coast of Tanzania does not feature in global startup ecosystem rankings; however, the move by the government of those islands is seen as deliberate positioning to make “Silicon Zanzibar” Africa’s next destination for talent and innovation. The region’s leadership has stated that they will collaborate with business owners to create an atmosphere that is friendly to tech startup
The people in charge of the region say they will work with entrepreneurs to ensure the environment is good for tech startups.
“We ‘re happy to formally partner with Wasoko and other tech firms coming to Zanzibar to co-create policies and initiatives that would make Zanzibar a leading tech hub for Africa,” said Mudrick Soraga, Zanzibar’s Minister of Investment and Economic Development.
Soraga said that the government will make it easier for skilled tech workers to get work visas and make it possible for all tech companies to do business in this world. The well-known place to visit
Dar es Salaam, the largest city in Tanzania and the country’s financial centre, is at number 583 on StartupBlink’s list of the top 1,000 cities worldwide. It has moved up 141 spots in just the last year. The city is ranked sixth in East Africa.
Wasoko was recognized by the Financial Times as Africa’s fastest-growing company in May. This came after the company successfully raised 125 million US dollars in March, making it the largest venture fundraising for a non-fintech startup on the African continent.
The startup is now worth USD 652 million, putting it on track to become East Africa’s first “unicorn” with a billion-dollar valuation. Wasoko’s Innovation Hub, which is currently under construction on Zanzibar Island, is anticipated to attract additional funding to the region, making it a more attractive investment destination at a time when investors are investing in African startups that utilize digital platforms to make it simpler for informal retailers to access goods from distributors and suppliers.
Wasoko is a Pan-African tech company. CEO and Founder Daniel Yu said, “We’ve been looking for a place where we can bring together the best talent from across the continent and beyond to develop new products and services for our customers.”
The Economist Intelligence Unit says that Africa spends more than US$ 1.4 trillion on retail goods annually, which is expected to rise to US$ 2.5 trillion by 2030.PriceWaterhouseCoopers says that 90% of these sales are made through unofficial channels like kiosks and street vendors.
In 2019, 94 per cent of all online businesses in Africa came from just ten countries, according to the International Trade Centre’s (ITC) 2020 report, “Mapping e-Marketplaces in Africa.” This shows that there is a lot of untapped e-commerce potential in Africa.
Significant funding has been raised in the last year by B2B e-commerce startups looking to fill this gap and capitalize on opportunities.
In addition to Wasoko, Kenya’s MarketForce and Twiga, Nigeria’s TradePort, Alerzo, and Omnibiz are B2B platforms that have helped raise more than $400 million for e-commerce startups since July 2021. Over three-quarters of this venture capital went to new businesses in Kenya and Nigeria.
Nigeria’s TradePort, which has offices in South Africa and Ghana, raised US$ 110 million in December 2021 and wants to grow into other African countries.
MarketForce got US$40 million in Series A funding at the beginning of February so that it could expand its services to markets in East and West Africa. Market Force has offices in Nigeria, Tanzania, Rwanda and Uganda,
Statista says that global retail e-commerce sales will grow from 4.9 trillion US dollars in 2021 to 7.4 trillion US dollars in 2025. Zanzibar wants to take advantage of this huge opportunity to become the regional centre for new tech solutions.