Working in the energy and industry sectors in various African countries helped Niama El Bassunie, a Casablanca-born entrepreneur, discover the trading gaps these markets faced. She realized that buyers face issues getting responses from suppliers or get in touch with them.
With her colleague Mehdi Daoui, who worked in trading at the French bank ‘Banque Populaire’ in Guinea, she decided to create a platform that connects buyers and suppliers in one place. They also partnered with insurance company Coface in case of fraud.
Their model was inspired by the giant chinese Alibaba which started with B2B trading before growing into a bigger ecommerce platform.
Her first venture, Waystoenergy, was launched in 2010, and was more specialized in used cooking oil trade. She then altered her startup’s orientation from energy-focused to general trade because she saw high demand for generic products, so she launched Waystocap.
Founded in 2015, Waystocap is a B2B trading platform that caters to the African market, the website helps businesses all over the continent buy and sell products that include F&B, household appliances, multimedia, and home & kitchen among others.
Around 90 percent of Waystocap’s profit is from agri-food trade but the startup is also putting on sale, charcoal, paintings, led lamps and textiles. According to Bassunie, with a potential of $ 720 billion for cross-border trading in Africa, the market they are playing on is offering great opportunities to expand more.
The key challenge is financing cross-border trade where there is a significant lag between payments and the delivery of goods and services. In the absence of trade finance, international trade would be daunting as distance and institutional differences between trading partners in different countries make contract enforcement difficult.
All of these hurdles led the team of four, including Bassunie, COO Daoui, chief sales officer Anis Abdeddine, and CTO Aziz Jaouhari Tissafi, to launch their business and back it with reliable clients. They financially started the startup by bootstrapping it. The initial investment was not disclosed.
Securing the trade process
Waystocap offers secure trade, secure product quality, and secure payment through an undisclosed partnering bank. Waystocap is facilitating the trade process without playing the role of a middleman, which is holding back the whole trade cycle in Africa. “This is an issue in Africa. A lot of people have cash but when they want to trade, they have to go through many middlemen and local actors that they kind of lose money, since there are no online platforms or companies that cover the whole territory in B2B,” said Daoui. Waystocap takes a commission whenever the transaction is concluded. It costs less than using several middlemen. Commission fees can be up to two percent when the trading is about products that have fixed prices on the market like the plastic containers Waystocap is selling on the platform for instance. It can grow more or less when the price like that of sugar or oil is changing on an international scale.
Waystocap stops working with the client once the product reached the export or delivery phase.
“We don’t handle the delivery. Our job is to provide the payment gateway, but afterwards, the buyers and the sellers will have to take care of the transaction on their own,” added Daoui. The platform only facilitates the trade but does not interfere in the application.
To avoid any fraud, payment default or non-serious clients, potential buyers and sellers are subject to an evaluation before they join the marketplace and starting using it. They check with their networks of banks to make sure the clients are well-reputed, said Daoui. The trading is always in West African CFA franc since it is a common currency for West Africa.
Funding and expansion
Waystocap applied in 2015 to the Y Combinator accelerator program in San Francisco. “They helped us in how to test the concept for several times before having the perfect product. They also helped us on traction and in networking with Coface for instance,” Bassunie said. The startup is also the first Moroccan one to be incubated in the US.
More than an acceleration program, the team finished their year at Y Combinator fundraising $ 3 million last June, when they were only expecting $ 1 million said Daoui. “The fact that people believed in us also brought a lot of potential clients. This was important for the partnership with the insurance company: if something goes wrong in one of the transactions, such as an occurring fraud, the company won’t lose money right away because it has other clients,” Daoui said.
With their new funds, the startup is planning to expand its reach in West and South Africa. Yellow Pages of Africa and South African based B2B portal which has already 62,000 clients registered on the platform.
Currently, Waystocap’s team consists of 21 employees, and has offices in Casablanca and in Benin.
Feature image via Pexels.