A wholesale e-commerce platform based in Kenya, Powered by People, has secured $5 million in seed funding to increase its transaction volumes by growing the number of small brands using its B2B online marketplace to reach international buyers.
The equity funding was led by Susa Ventures and Golden Ventures with participation from a number of investors including Flexport Ventures, J Ventures, and the founders of DraftKings, Fabric. It brings the total funding raised by the startup to $7 million, having previously received support from a number of investors including the Founders Factory Africa, Mercy Corps and the Mastercard Foundation.
Powered by People links small brands to retailers keen on supply-chain transparency, sustainability and small-batch production – companies that are also pushed by the need for diversity and have pledged to support small traders as they also keep up with the rise of conscious customers.
Speaking about the equity investment, Powered by People co-founder and CEO Ella Peinovich said, “we are going to continue building up our technology…we have new vendor tools we are launching this quarter that will help streamline and automate things to help these businesses take on bigger orders and grow. We are also investing in building our senior leadership.”
The startup works with over 200 brands and over 45,000 artisans from 47 countries, who sell to retailers like West Elm and The Citizenry, across major markets including in North America and Asia. The business recorded an annualized run rate of $15 million in total gross merchandise value by mid-March, and they expect to grow this to $25 million before the year ends. Orders on the platform average $1,200.
“We are providing these businesses with new visibility into the specialty retail market in North America. We have also introduced them to wholesale, which we think is the best way to source from any country, and make business sense too,”
The startup also extends up to 50% advance financing to traders helping them to quickly process customer orders. The 120-day facility attracts a 5% interest rate. The startup has already given out $5.8 million in credit to traders and plans to issue an additional $10 million before the end of the year.
“It is absolutely true that a lot of our makers would not take on larger transactions because they don’t have the cash flow. We are extending them the financing to enable them to scale up their businesses,” she said.
Peinovich, Hedvig Alexander and Alison Phillips founded Powered by People in 2019 to enable emerging brands access global markets. For Peinovich, it wasn’t the first to set up a social enterprise. Back in 2011, she teamed up with Catherine Mahugu and Gwendolyn Floyd to launch Soko, a fashion brand that works with thousands of artisans to produce accessories for sale to international markets. She moved to Kenya 10 years ago after graduating from MIT and assumed the CEO position until 2018.
The idea behind Powered by People was to create a platform that enables multiple brands access international markets, which was a shift from running a production line.
“As a seasonal brand, we sold three quarters of our sales in the last quarter of the year. But what about the other three quarters of the year? How do we provide sustainable growth for these artisans? I really believed in what we were doing at Soko and I felt that we should do that for other brands. And so Powered by People came out of that idea,” said Peinovich.
The blueprint was clear: she wanted to create a marketplace for artisan traders, to give them access to financing and business tools like the customer relationship management platform, which helps them manage and scale their businesses.
“They can track items; we also provide low-cost payment transfers from the US, which is our primary market. We provide payment rails so that they can receive orders in US dollars. We’re also providing aggregation of logistics,” said Peinovich.
Powered by People is also creating regional hubs to ensure quicker order deliveries, tapping the opportunities in drop-ship e-commerce.
Peinovich said she has always been drawn to social enterprises. She noted that every item produced by the artisans always has a backstory.
“The fact that I can align my purpose with a business opportunity, and the fact that the artists we work with and the small independent retailers can realize their retail vision by sourcing products and narratives that is inspiring to customers, is extremely rewarding,” she said.
Read the original article @ TechCrunch