Gloo.ng, a Nigerian start-up is dropping there major business line which is consumer online retailing and is now moving to a new line of business which is B2B e-procurement with Gloopro as its brand-new name.
According to TechCrunch, Gloopro which is a Lagos based company has stop their business of e-commerce grocery services and have shifted to a new business where they provides medium and big companies with everything from desks to toilet tissue.
D.O. Olusanya, Gloopro CEO has said that with their new platform, they will generate revenues on a monthly fee structure and a percentage on items or product delivered.
Gloopro CEO, D.O. Olusanya, also said that when the company was using the brand name Gloo.ng, it raised about a million dollars in seed capital. He said that the company is in the process of raising its Series A round. In the bit to raise the Seria A round they intend to look beyound the shores of Nigeria. They hope to achieve this objective before the end of next year.
Gloopro’s changing business line from B2C to B2B can be as a result of how difficult it has been for consumer digital sales startups has consistently fail in Nigeria. Launching a digital and e-commerce business in Nigeria is very difficult to sustain, irrespective of the country being Africa’s most populous country with the continent’s greatest number of online shoppers. Read a report by UNCTAD that support this claim by clicking here .
TechCrunch went on to say that Nigeria is home to the continent’s first e-commerce startup giant, Jumia, and serves as an informal bellwether for e-commerce start-up activity in the continent of African.
According to Olusanya, Gloo.ng’s shift to B2B electronic commerce was triggered by Nigeria’s 2016 financial recession and also by popular demand from customers.
When the economic recession struck it negatively affected all e-commerce consumers in the country. This is what the Gloopro CEO told TechCrunch. He believe it will take them a longer time to get to sustainability and profitability which is what every business want to see.
Then an existing client, Unilever, requested an e-procurement solution in 2017. “We observed that the unit economics of that business was far better than consumer e-commerce,” said Olusanya.
Gloopro dubs itself as a “secure cloud based enterprise e-procurement and commerce platform…[for]…corporate purchasing,” per a company description.
“The old brand Gloo.ng, is going to be rested and shut down completely. The corporate name will be PayMente Limited with the brand name Gloopro,” Olusanya said.
From the Gloopro interface customers can order, pay for and coordinate delivery of office supplies across multiple locations. The product also produces procurement analytics and allows companies to designate users and permissions.
Olusanya touts the product’s benefits at improving transparency and efficiency in the purchasing process.
“It makes procurement transparent and secure. A lot of companies in Nigeria still use paper invoices and there are some shenanigans,” he said.
Gloopro began offering the service in beta and building a customer base prior to winding down its Gloo.ng grocery service.
In addition to Unilever, Gloopro clients include Uber Nigeria, Cars45 and industrial equipment company LaFarge. Cars45 CEO Etop Ikpe and a spokesperson for Uber Nigeria confirmed their client status to TechCrunch.
Olusanya thinks the business can take on other worldwide e-procurement companies, such as SAP Ariba and GT-Nexus, by “leveraging our sourcing and last-mile shipment experience in Nigeria” and proficiency working around regional requirements in Africa.
Gloopro expects to hit $4 million in revenue by the end of the year and the company could reach $100 million over the course of its international expansion into countries like South Africa, Kenya, Morocco, Egypt and the Ivory Coast, according to Olusanya. A seed investor briefed on Gloo.ng’s estimates confirmed the company’s revenue expectations with TechCrunch.
Gloo.ng’s pivot to Gloopro and e-procurement comes during an up and down period for B2C online retail in Nigeria, home of Africa’s largest economy.
Last year, e-commerce startup Konga.com, backed by roughly $100 million in VC, was sold in a distressed acquisition, at a loss to investors, including Naspers. In late 2018, Nigerian online sales platform DealDey shut down.
There is a report going on that Jumia which is Africa’s biggest e-commerce website that has its very first unicorn headquarter in Nigeria– is pursuing an Initial public offering (IPO). Although, that information has not been confirmed based on a February 8, Bloomberg story without named sources. Jumia is yet to comment if the story is true or false.