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

Restructuring at African B2B Startup Sabi as it Shifts Focus to Commodity Exports

African B2B e-commerce startup Sabi has recently undergone a restructuring, resulting in the layoff of approximately 50 employees, which accounts for around 20% of its workforce. This move comes as Sabi pivots from its original retail-focused platform to concentrate on the burgeoning business of commodity exports.

The company confirmed the layoffs in a statement released on Thursday. This restructuring is part of a broader strategy aimed at aligning resources with the increasing demand for traceable and ethically sourced commodities. Sabi began developing this sector last year under a new vertical called TRACE (Technology Rails for African Commodity Exchange).

Evolution from Retail to Commodity Exports

Established in Lagos in 2020, Sabi initially operated as a software platform assisting informal retailers in digitizing their inventory and sales during the disruptions caused by COVID-19. It later expanded into a fast-moving consumer goods (FMCG) marketplace with integrated financial services, expanding its operations across Nigeria and Kenya. By mid-2023, Sabi boasted over 300,000 merchants and an annualized GMV of $1 billion.

This growth trajectory led to the successful raise of a $38 million Series B funding round at a valuation of $300 million. Despite maintaining profitability with an asset-light model, Sabi encountered challenges common in the B2B e-commerce sector in Africa, such as slim margins and tough unit economics.

Transition to Commodity Trade

In March, Sabi introduced TRACE as a new business line alongside its FMCG segment. This vertical focuses on mineral and agricultural exports like lithium, cobalt, tin, and cash crops, catering to global buyers’ increasing demands for transparency, ESG compliance, and traceability.

Sabi now exports over 20,000 tons of such commodities monthly to clients in the U.S., Europe, and Asia. The company has expanded its operations to the U.S. and made key hires to support this growth.

Embracing Change for Sustainable Growth

Sabi’s shift towards commodity trade underscores a strategic shift in the African e-commerce landscape. By focusing on infrastructure for global trade, the company aims for higher margins and a clearer path to profitability. However, this transition necessitated internal restructuring, as evidenced by the recent layoffs.

In a statement, Sabi expressed its commitment to serving global customers through commodity trade and traceability, emphasizing its dedication to supporting African merchants’ growth. The company acknowledged the challenges of this transition but remains optimistic about the opportunities it presents.