Elloe.ai, a Kenyan-based conversational commerce (e-commerce) startup focused on Kenya and emerging markets has raised Sh115.6 million ($1 million) in a pre-seed round of financing.
The round was led by Philippines Mad Ventures, Inc, a venture capital firm.
Co-founded by Cambridge graduate and serial entrepreneurs Owen Sakawa, Abhijay Rao and Aaron Madolora, Elloe is a first-of-its-kind AI-powered, conversational commerce platform which allows small and medium-sized enterprises (SMEs) to buy and sell products online across any messaging platform.
Conversational commerce allows businesses to sell products in a personalized way through messaging apps by bridging the proximity of the physical world with the convenience of digital commerce.
“Conversational commerce is a simple technology solution that allows businesses to meet end-users where they are already — in their favorite mobile communication channels,
“This round of funding will be used to expand our local Kenyan operations and fuel our expansion into the Philippine and Southeast Asian markets well into 2023 and beyond,” Owen Sakawa, who also serves as Elloe chief executive officer, said.
According to a Gartner report, e-commerce is already a Sh4.1 trillion ($35 billion) market with the potential to reach Sh15 trillion ($130 billion) by 2025 in emerging markets, where it represents 60 percent of digital commerce and 8 out of 10 consumers are exposed to online shopping exclusively via c-commerce.
Messaging is becoming the primary way consumers and businesses communicate.
But businesses currently lack a digital solution tailored to their business to handle a large volume of conversations and fail to effectively integrate shopping and booking in chat.
“In response to the demands of emerging-market businesses and consumers, Mad Ventures continues to make significant progress in providing digital livelihood options to the unemployed and unbanked,” said Aaron Madolara, group CEO of Mad Ventures, Inc.
“We are thrilled to be collaborating with Elloe to broaden our collective reach and assist businesses, particularly underserved micro-SMEs, in realizing their full potential."
This comes at a time when local start-ups raised Sh11.4 billion ($100.6 million) last year, buoyed by an increase in the number of start-ups that secured funding.
Kenyan start-ups raised Sh33.17 billion ($291.98 million) last year up from Sh21.74 billion ($191.4 million) in 2020, representing a 52.6 percent jump.
A rise in investment was boosted by a growth in the number of start-ups who raised seed funding from 59 to 87 between the period, growing by 47.46 percent.
“In general, Kenya has been on the rise for the past years, with the amount of funding raised in the country spiking year-by-year.
“In 2020, the amount raised by the country’s startups was the biggest total achieved by any country to date - beating Kenya’s own previous record, set only the year before in 2019. In 2021, Kenya beat the record amount again, but so did other countries, the above three of which have shot ahead,” the 2021 Disrupt Africa Tech Startups Funding report shows.
Out of Sh33.17 billion raised, Sh9.7 billion ($85 million) came from AI Company Gro Intelligence under Series B round and agri-tech venture Twiga Foods, which raised Sh5.7 billion (US$50 million) in Series C funding.
