African E-Commerce Startup Sabi Cuts 20% Staff, Shifts to Export Tracking After $38M Raise
▼ Summary
– Sabi, an African B2B e-commerce startup, laid off 20% of its workforce (~50 employees) as it shifts focus from retail to commodity exports.
– The restructuring aligns with growing demand for traceable, ethically sourced commodities, a business vertical called TRACE launched in 2023.
– Originally a platform for informal retailers, Sabi expanded into FMCG and reached 300,000 merchants with $1B in annualized GMV by mid-2023.
– Despite profitability, Sabi faced challenges like thin margins and capital intensity, prompting its pivot to higher-margin commodity exports.
– Sabi now exports 20,000 tons of minerals and crops monthly, targeting global buyers seeking ESG compliance and traceability.
African e-commerce platform Sabi has reduced its workforce by approximately 20% as it shifts focus toward commodity exports, following a successful $38 million funding round. The company confirmed the layoffs, affecting roughly 50 employees, as part of a strategic realignment to prioritize its TRACE (Technology Rails for African Commodity Exchange) division, which specializes in traceable and ethically sourced exports.
Founded in Lagos in 2020, Sabi initially helped informal retailers digitize operations during the pandemic before expanding into a fast-moving consumer goods (FMCG) marketplace with embedded financial services. By mid-2023, the platform boasted over 300,000 merchants and $1 billion in annualized gross merchandise value (GMV), securing a $300 million valuation in its Series B round.
Despite its early success, Sabi encountered challenges common to B2B e-commerce startups in Africa, including tight margins and capital-intensive operations. Unlike competitors that struggled with cash burn, the company maintained profitability through an asset-light model. However, market dynamics prompted a strategic pivot toward commodity exports, where demand for transparency and ESG compliance is surging globally.
In March, Sabi launched TRACE, a new vertical focused on minerals like lithium, cobalt, and tin, as well as agricultural products. The platform now facilitates the export of 20,000 tons of commodities monthly to buyers in the U.S., Europe, and Asia. To support this expansion, Sabi has established a presence in the U.S. and brought on senior executives with expertise in global trade.
The restructuring reflects a broader trend among African commerce platforms seeking sustainable business models. While Sabi’s pivot offers higher-margin opportunities, it also highlights the challenges of balancing growth with operational adjustments. The company emphasized its commitment to supporting African merchants while capitalizing on the growing demand for traceable supply chains in international markets.
As Sabi transitions into its next phase, its evolution from a retail-focused platform to a global trade infrastructure provider could set a precedent for other startups navigating Africa’s complex e-commerce landscape. The move underscores the importance of adaptability in an industry where profitability often hinges on strategic agility.
(Source: TechCrunch)
