While running their previous business, fashion-focused online marketplace Traclist, Segun Afolahan and Emotu Balogun experienced the trials of building e-commerce startups in Africa.
Having closed Traclist, the pair are now addressing those issues with their latest venture Sendbox, a tech-enabled platform that provides shipping, escrow payments, and discovery services to merchants and customers from SMEs that sell products using social media channels like Instagram, Facebook, and WhatsApp.
The platform allows users to safely partake in e-commerce on distributed social platforms by providing a means to identify trustworthy merchants, securely pay for items, and ship to domestic and international destinations.
“We provide these services by aggregating some logistics partners, both local and international, and connecting them with these small and medium enterprises, along with the escrow payment services to build business confidence between customers and merchants,” Afolahan told Disrupt Africa.
He said Nigerians were undertaking a lot of transactions using informal channels that are not designed for e-commerce, including social media platforms, which posed challenges.
“While these channels provide good tractions and awareness, there rarely exists a coherent structure or framework to provide the extra value that the traditional marketplace has,” Afolahan said.
This is where Sendbox comes in, carving out a niche for itself that is distinct from logistics companies providing similar services to existing small and medium sized merchants who run their businesses via social media. What makes it stand out is its escrow service, which makes buying and selling on social media platforms less risky.
Initially, Afolahan and Balogun self-funded Sendbox, as they wanted to ensure they had a business that would solve a vital problem in the ecosystem. In March, it secured its first external funding, from early-stage VC firm Microtraction, which Afolahan said was needed to help it improve on its existing products and launch a handful more.
“We will be rolling out new products in a few months,” he said, adding uptake so far had been “interesting”.
“After a lot of iterations, we believe we have product-market fit, and a good number of merchants are interested in our services and utilising them regularly. We are growing rapidly and expanding horizons.”
Aside from adding new products, Sendbox also has plans to expand into new markets. Currently only operating in Nigeria, it has fairly sharpish plans for growth.
“We are able to facilitate local and international transactions, and in the nearest future we hope to expand to markets in Ghana, Kenya and other African countries,” said Afolahan.
The startup generates revenue from commission charged on transactions made on its platform, but said it was still in a growth phase and thus not focusing much on profitability at this point.