After raising $38M, African e-commerce startup Sabi lays off 20%, pivots to traceable exports

Sabi, a B2B e-commerce startup based in Africa, has made the difficult decision to reduce its workforce by approximately 20%, affecting around 50 employees. This move comes as the company shifts its focus from a retail-centered platform to expanding its operations in the commodity exports sector. The layoffs, confirmed by Sabi on Thursday, are part of a strategic restructuring designed to align the company’s resources with increasing demand for traceable and ethically sourced commodities. Founded in Lagos in 2020, Sabi initially served as a software platform aimed at helping informal retailers digitize their inventory and sales during the disruptions caused by COVID-19. Over time, the company grew into a fast-moving consumer goods (FMCG) marketplace with integrated financial services, achieving significant growth across Nigeria and Kenya. By mid-2023, Sabi boasted a network of over 300,000 merchants and reported an impressive annualized gross merchandise volume (GMV) of $1 billion. This remarkable growth trajectory facilitated a successful $38 million Series B funding round, valuing the company at $300 million. However, like many startups in Africa’s B2B e-commerce landscape, Sabi encountered challenges such as thin profit margins and the capital-intensive nature of the business. Unlike some competitors, Sabi has managed to remain asset-light and profitable, but the shifting market dynamics prompted a reevaluation of its business strategy. In March, Sabi launched a new business line named TRACE (Technology Rails for African Commodity Exchange) to diversify its offerings. TRACE focuses on exporting minerals and agricultural products like lithium, cobalt, tin, and cash crops, which are increasingly sought after by global buyers demanding transparency and adherence to environmental, social, and governance (ESG) standards. Currently, Sabi exports over 20,000 tons of these commodities each month to markets in the U.S., Europe, and Asia. Moreover, the company has recently expanded its operations into the United States and has made key senior hires to bolster its growth in that region. "Sabi is entering its next chapter with a dedicated focus on commodity trading and traceability for our global clientele," the company stated. "We are refining our business model to better serve the growing demand while maintaining our commitment to supporting African merchants. Consequently, we’ve had to make the tough decision to restructure certain parts of our team." This transition highlights a broader trend within the African informal commerce sector, where companies are seeking sustainable growth. Sabi’s pivot towards becoming an infrastructure player in global trade illustrates that such a transformation is indeed feasible. While this new direction promises higher profit margins and clearer pathways to profitability, it also necessitates significant internal adjustments, as evidenced by Sabi’s recent restructuring efforts.