Afrimarket had a unique solution that applies an eCommerce approach to solve a remittance problem, backed by merchant and money transfer operator partnerships, and a strong distribution and logistics operation. The investment had the potential to amplify the contribution of remittances to development in West Africa. GIF’s investment was designed to enable Afrimarket to build out their distribution operation and acquire new customers, thereby increasing Afrimarket’s social impact.
Afrimarket provided a low-cost cash-to-goods service for European migrants to send remittances to West Africa. The company benefitted both remittance senders and recipients in West Africa. Afrimarket offered senders commission charges that are over 20% lower than average, since Afrimarket was able to offset lower fees through recouping revenue from partner merchants. There is evidence that lower fees and a cash-to-goods approach increase remittance flows from senders, which in turn benefit recipients. Recipients also benefitted from the quality and breadth of the products on Afrimarket’s platform, which comprised10,000 SKUs from accredited retailers.
Afrimarket was a for-profit company that worked in countries with average incomes significantly below $5 PPP/day. 50% of Afrimarket’s beneficiaries were in areas outside capital cities, which have average incomes below $3.50 PPP/day. Afrimarket provided pro-poor products: 70% of its sales were food, and the top 9 products sold were in the food and hygiene categories. Afrimarket occupied in a unique niche between remittances and eCommerce. Afrimarket’s cash-to-goods model served as a complement to traditional money transfer operators.
The proceeds of Afrimarket’s 8mn EUR Series B round were for investments in staff (digital marketing, developers, commercial and delivery staff hiring, as well as capex required for delivery) and technology (logistics tools, eCommerce and app investments, and complete integration into Orange Money France’s remittance service).
To build out distribution operations and acquire new customers.
Founded in 2013, Afrimarket raised 50 million euros. It operated in five markets –Ivory Coast, Senegal, Cameroon, Mali, Benin, with 250 employees, before shutting down operations in 2019.