Sote, an African supply chain startup, has raised another $4 million in a seed extension round to expand its solution offering into fintech.
The round, which brings its total funding to $8.4 million, was led by Chamath Palihapitiya’s firm, Social Capital, with Ray Ko, the growth partner joining Sote’s board. Others included venture capitalist Justin Saslow, Harry Hurst, Founder/CEO of Pipe, MaC Venture Capital doubling down, and K50 Ventures.
The startup was founded in 2018 by a Kenyan native Felix Orwa and co-founders Meka Este-McDonald, a former product manager at Verizon and Gigster, and Scott Yacko, a former director of software engineering at Amazon and director of architecture at Walmart with the aim of introducing visibility and transparency to industrial importers and exporters in Africa. It offers a real-time dashboard that gives manufacturers, retailers, and distributors visibility into shipment progress while saving time and money.
“Sote is constructing Africa’s largest B2B marketplace and digital logistics infrastructure. Our goal is to make trade more accessible and affordable while also contributing to the continent’s economic growth. We are an authorized economic operator and a fully licensed customs agency. Across the continent, we want to deliver a mix of finance underwriting models, software-driven supply chain services, and SaaS solutions. We are the first to bring an approved digital custom clearing and forwarding solution to the market in Africa, giving industrial importers and exporters visibility and transparency “Orwa said in a statement.
He added: “If the supply chain is composed of the flow of product, the flow of information, and the flow of cash, then Sote already controls the first two. With the launch of our Fintech solution, we will have control and a positive influence on all three. This creates a powerful flywheel effect with our customers as they find more holistic and convenient bundled services between logistics and capital solutions”
Sote plans to target larger consumers in 2022 and exceed growth targets after recently obtaining Authorized Economic Operator (AEO) status. There are roughly 20 million containers that move through Africa annually. The company charges approximately $1,500 per container handled and as of December 2021, it had 50 customers.