Copia, a Kenyan ecommerce and logistics startup operating in central Kenya, has raised $26m in a series B funding round, led by LGT Lightstone, with participation from Perivoli Innovations, Endeavor Catalyst, ELEA and Goodwell Investments. The new investment could lead to a step change in how poorer, rural Kenyans access retail services.
Copia was founded in 2013 and received $2m in funding from Netherlands-based social investor Goodwell Investments in January 2019. Before this latest funding round it had raised $20m in equity financing, mostly from social investors. Prior to launching its new retail service in April 2019, Copia primarily focused on the FMCG sector, as well as farming inputs as construction.
Copia’s business model uses a network of 5,000 agents (up from 3,700 in April 2019), who are mostly local shopkeepers and business owners. These agents earn a commission by providing the point of “aggregation of orders and delivery distribution” for customers who have purchased goods via Copia’s online platform or app. Those customers can place orders via agents, pay agents and must also receive their goods via agents – drastically cutting down on costs and complexity of serving final mile delivery.
Copia, which only operates in central Kenya at present, says it has fulfilled more than 3m orders to 450,000 consumers. In April it claimed to have served 2m orders to 300,000 customers. If accurate, these numbers reflect a radical increase in business volume. Average order values are around $10, compared to around $66 for Jumia.
Copia wants to expand in East Africa and, potentially, further afield. It is not the only agent-led model operating in Africa. In April 2019, Cairo-based Brimore, a mobile digital platform which enables the distribution of consumer goods through informal retailers, raised $800,000 in seed funding. Like Copia, Brimore sells directly to consumers through a network of 5,000 freelance sales agents, akin to the traditional Avon model (but for multiple manufacturers.
The investment in Copia comes at a time when the leader in ecommerce in Africa, Jumia, has had to trim its operations. It is clear final mile delivery ecommerce retail to customers is in less developed markets such as Cameroon and Tanzania is largely unprofitable and unsustainable at present. Behind the scenes, Jumia is focusing much more heavily on more profitable parts of its business, including its marketplace and its payment platform.
Copia’s model is particularly interesting because it directly challenges the traditional retail model and provides a platform reaches into underserved communities, eliminates the cost and complexities of final mile delivery and also provides the reassurance of a shopkeeper for the many customers who still do not trust ecommerce.
