Copia Global, a Kenyan Business – to – consumer (B2C) firm, has raised $50 million in a Series C equity round led by Goodwell Investments.
The funding comes three years after Copia’s $26 million Series B financing. Copia’s total fundraising since its founding in 2013 now stands at $83.5 million, including its Series C.
New investors such as Zebu Investment Partners, the US International Development Finance Corporation (DFC), and Koa Labs joined previous investors, Lightrock, the German development finance organization DEG, and Perivoli Innovations in the new financing round.
A brief history of Copia global and how it works
Copia Global, was founded in Kenya by Tracey Turner and Jonathan Lewis in 2013 as a B2C e-commerce platform to serve Africa’s middle- and low-income African consumers, uses mobile technologies, a network of local Agents, and proprietary Copia Logistics to reach a market that traditional retail and Western e-commerce models can’t. It provides thousands of clients with high-quality products at low market pricing delivered at no cost every day.
“The basic idea of Copia was to discover a sustainable and lucrative way to serve consumers so that we could improve their quality of life and that of their families,” CEO Tim Steel explained. The organization is establishing a long-term business model that comprises a three-way connection with clients and 30,000 agents across Kenya and Uganda.
It is common knowledge that low-income African clients have distrust for e-commerce platforms. Even if it involves driving large distances, the majority of them would prefer to go to a physical store and receive what they want.
As part of its strategy, Copia recruits and trains small company owners who have already developed a level of familiarity and trust with customers. They dress in Copia uniforms and promote the platform to individuals in local areas, eventually persuading them to make their first purchase on the e-commerce site. These agents then perform a secondary function as aggregated delivery points.
According to the CEO, Copia’s value proposition is solid, with things not readily available to the average consumer. Customers would normally travel to the nearest city or send a relative to buy goods like building supplies or medicine. Rural Kenyans spend an average of nearly an hour and $4 per trip to buy such items.
For example, with Copia, 20 clients in a given location can place different orders, and the company would deliver them to its agents, whose shops and stores are adjacent to those customers. Customers will be able to pick up their orders whenever they desire. Copia also claims to be able to make delivery to customers’ homes if they so desire.
“From a cost and unit economics standpoint, this contributes to the model’s viability.” But it also means we don’t have the same problems as many e-commerce enterprises when a delivery fails because the recipient is not present. “Our agents are constantly there because they’re running their businesses,” Steel explained when asked why logistics costs don’t affect Copia as much as they do others.
“While mobile technology underpins everything we do,” Steel continued, “it is Copia’s relentless focus on building trust – by providing low prices, high-quality products, on-time delivery, and unwavering customer service – that has enabled Copia to succeed in a market that many thoughts was impossible.”
Consumers from the city and the diaspora can utilize the service to shop for loved ones in rural areas. Instead of buying the things and driving them home or sending the goods or money home on a bus, these middle- to high-income consumers can buy the goods and send them to their relatives using Copia’s website or app.
Customers can interact with Copia in one of two ways: online or offline, according to the agent network approach. The e-commerce firm gives agents a fee on every good sold, boosting their earnings by more than 30%. According to the company, women make up 77% of the organization’s 30,000 agents.
Copia delivers merchandise to its consumers within 24 to 48 hours. According to Steel, it does not charge clients a delivery cost, which sets it apart from other e-commerce platforms. Copia reduces delivery costs by reducing traditional supply chain processes by aggregating multiple commodities straight from vendors. Steel added that Copia has about 1.4 million unique clients and is roughly doubling every year. Copia claimed in a statement that it delivers products to thousands of consumers every day and has completed over 10 million orders to date.
Copia’s future plans
The company revealed plans to expand the Kenyan company’s strategy across East Africa, primarily Kenya, Uganda, and, in the future, Rwanda and Tanzania using the Series C funding. Steel estimates that in the next several years, Copia will be able to access 80% of Kenya’s serviceable market, up from 50% now. Copia is exploring other African markets and may expand into Nigeria, Ghana, Cote d’Ivoire, South Africa, Zambia, Mozambique, and Malawi, depending on socioeconomic and political macroeconomic conditions.
Consumer expenditure in Africa is expected to reach $2.1 trillion by 2025, according to the IMF, with the middle class driving this growth, providing a tremendous source of potential prosperity. Formal stores and Western-style e-commerce enterprises, on the other hand, struggle to profitably serve this consumer group due to significant logistics expenses. Copia may successfully serve a previously unprofitable market by overcoming geographical constraints using world-class delivery capabilities, truck routing software, local knowledge, and mobile tracking technologies.
What investors are saying
“Copia broadens access to cheap household items for families, independent of their economic level, access to technology, or geography,” says Els Boerhof, managing partner at Goodwell Investments. This is in line with Goodwell Investments’ strategy of supporting businesses that provide affordable essential goods and services to underserved groups in Africa. People in rural areas in Africa generally drive to the nearest city to purchase vital products such as building supplies or medicine, which is both expensive and time-consuming: on average, rural Kenyans spend over an hour and $4 every commute. Copia’s e-commerce model is tailored to the specific needs of the African market, saving time and money for many Africans.
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