High growth Moroccan B2B buying platform Chari has acquired the Diago app in Cote d’Ivoire. Diago is a small startup that connects traditional retailers with FMCG suppliers. It marks a step change in francophone West Africa – markets which Chari has always said it intended to enter.
Diago was founded in 2021 by Ali Outtara and Amidou Diarra. Outtarra previously worked for PepsiCo but latterly led Q commerce app Glovo’s efforts to connect with informal retailers in Abidjan. Neither had worked full time on Diago until February 2022. Both will stay in their roles, leading Chari’s efforts in Cote d’Ivoire. Diago will be integrated into Chari’s Casablanca back office function.
Chari was founded in January 2020 in Morocco, and expanded into Tunisia in early 2022. In March 2022, Chari acquired Axa Credit, the credit branch of Axa Assurance Maroc, for $22m. It had recently closed a seed extension round and is currently seeking to raise a large Series A funding round.
In October 2021 Chari acquired Karny, a fintech app working with small retailers in Morocco to help them offer credit to their customers. Karny is a bookkeeping app that records loans retailers underwrite to their customers, also providing a valuable stream of data.
There are several things to note. The first is that Chari‘s co-founder Ismael Belkhayat’s is from the family that owns H&S/Dislog Group, one of the largest FMCG distributors in Morocco. This has been instrumental in helping Chari scale and build the relationships with FMCG manufacturers. Chari’s growth profile can, perhaps, also be viewed as a new online-led, route to market for Dislog-distributed brands.
Actually, FMCG distributor involvement in financing or incubating B2B platforms is very limited in Africa, which is surprising given the extent of the competitive threat they pose. It feels a lot like how Kodak misread the future of digital photography or Blockbuster couldn’t find a way to get into streaming.
The second key thing to note is how quickly Chari is expanding. It has made three acquisitions in the two and a half years since it was founded – no other B2B buying platform comes close. Chari’s model is buy-to-scale and buy in local expertise and it looks to be working.
There is little detail around how many retailers Diago works with or its turnover but it’s safe to assume the business is very early stage. Chari is buying a going concern and acquiring Outtara’s expertise gained from his time working with the traditional trade.
The third notable issue is that Wasoko, which has expanded out of Kenya and into the West African markets of Senegal and Cote d’Ivoire, now has a proper competitor. Wasoko has barely started in Cote d’Ivoire. A big part of its investor narrative is its decision to spread wide and quickly (compared to, for example, Twiga, which is more narrowly focused on Kenya with some expansion in East Africa).
The message to local entrepreneurs is clear: get in quickly, build your app, someone will want to buy you out rather than spend 6-12 months entering organically. As such, a common profile of entrepreneur is someone who has worked, like Diago co-founder Ali Outtara, with a major FMCG brand on route to market.
We can see this race to build competing apps most clearly in Nigeria, where there is a long list of indigenous B2B buying apps all trying to connect traditional retailers with the big, mass market brands: TradeDepot, Omnibiz, Alerzo, Sabi, Suplias, Betastore. They cannot all survive in the long term.
In the context of Cote d’Ivoire, the two big players in retail and distribution, CDCI and Prosuma, won’t be feeling the pain yet. But both have national networks of retail and wholesale stores: Chari and Wasoko’s entry into the market, catalysed by the supply chain disruptions and food price inflation, is minor competition today (and will be largely unfelt in the modern trade) but will affect regional wholesale performance in coming years.
