Nigerian VC firm Microtraction has announced its investment in Sendbox, an online platform that provides delivery services to ecommerce merchants.
This is Microtraction’s first investment of the year, and its 9th deal since inception.
The firm has previously invested in a host of Nigerian startups in the last year, including Accounteer, Riby, Thank U Cash, CowryWise, Bitkoin Africa, Wallet.ng, Allpro and Stack Dx.
As usual, the exact amount invested by Microtraction was not disclosed, but the VC’s website shows that it invests $65,000 in startups over two stages. First, it invests $15,000 for 7.5% equity stake, followed by an additional $50,000 convertible note.
So, what is Sendbox?
Sendbox is a Lagos-based startup founded in 2016 by Emotu Balogun and Olusegun Afolahan. The startups provides a platform for shipping, escrow payments, and discovery services to merchants and customers who carry out e-commerce transactions using social channels like Instagram, Facebook, and WhatsApp.
Interestingly, the founders both have a deep understanding of the ecommerce space having previously worked in a fashion ecommerce marketplace, Traclist.
Finding reliable shipping is a painful process for individuals, SMEs, and businesses that require it. And unlike ecommerce websites and marketplaces where the necessary shipping arrangements are available, social media platforms like Instagram and Facebook do not have them. This is where a startup like Sendbox comes in.
The startup allows users partake in e-commerce on distributed social platforms by providing a means to identify trustworthy merchants, securely pay for items using an escrow system, and ship to domestic and international destinations at discounted rates.
A Lucrative Market
By 2018, Nigerians that are active on Instagram and Facebook were said to be 20 million. Approximately 25% of this number participate in social e-commerce using these channels. And the African courier delivery industry is estimated to be between $250 — $300 billion in Market size.
And already, Sendbox is gaining traction. The startup has signed up over 4,000 merchants with approximately 1000 users who actually used the product at least once in the last 6 months. They are also generating over $4,000 in revenue monthly with over 400 active users (new and returning) and over 40% of transactions being made by returning users.
With this new investment, the startup would improve on its existing offerings and launch more innovative products. The funding would also be used to grow the Sendbox team by hiring more people and for training the current staff of 14.
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