Releaf is a new B2B marketplace that wants to help African businesses prosper by helping them find partners they can trust. The startup, which is currently taking part in Y Combinator, has signed up about 1,000 businesses since its public launch in Nigeria on August 3.
The startup’s three founders—chief executive Isaiah Udotong, chief operating officer Ikenna Nzewi and chief technical officer Uzoma Ayogu—started working on Releaf two years ago. The three Nigerian-Americans wanted to help African businesses benefit from the same online tools other markets have, but realized that building a new platform wasn’t enough. They also needed to address cultural differences.
The team says many Nigerian businesses are hesitant to find potential vendors or buyers online because fraud is rampant. Instead, they depend on word-of-mouth referrals and one-on-one networking.
“We polled how many transactions people need in order to build trust and people are still pretty timid about who they trust,” says Udotong. “That’s why we’re so excited to have transaction histories and to be able to show that these people have done business with this person and this person and this person, and that these are verified companies and not just random people.”
Releaf’s founders experienced that circumspection firsthand while talking to agricultural businesses. One user told the team that he cross-checked them on at least four social media platforms before deciding he felt comfortable working with Releaf. Akinwumi Adesina, Nigeria’s former Minister of Agriculture and Rural Development, is one of Releaf’s advisors, which also reassures potential partners.
By taking the verification and networking process online and making it faster, Releaf hopes to help African industries unleash their full potential. The startup’s team verify all potential users of the site themselves. Businesses need to provide their registration number from Nigeria’s Corporate Affairs Commission and references. To make sure the references are also legitimate, Releaf calls each one (which has the added benefit of getting out the word about their platform). Then Releaf boosts businesses that have made successful transactions through the site by making them more visible.
Releaf will focus on Nigeria first, then look at other markets once it raises its Series A. Its main priority right now is agriculture because it constitutes about a quarter of Nigeria’s gross domestic product.
“The leading motivation for our company is to do something tangible that can create value for the continent long-term and the quickest way to do that is to work in the private sector. We saw an article that said agriculture is 11 times more likely than other industries to alleviate poverty,” says Nzewi.
“In the private sector both parties are mutually benefited, so we want to find a way to use the private sector to not just generate wealth but also distribute it and see incredible returns,” he adds.
One of the main barriers to growth in Nigeria is that businesses need to master backwards and forward integration. For example, if a company wants to develop a new product or get more of an ingredient, they might need to start a farm, and if that farm needs power, they might also need to open a power plant.
“For a company to become successful in Africa, they need to have the power to go up and down in a supply chain. We want to link up companies and put them in conversation with one another so they can grow and focus on areas that they have expertise in,” says Nzewi. “If we can link up actors who know what to do, we can really enable value chains in Nigeria to grow.”
For suppliers, doing business sometimes means posting in WhatsApp groups and hoping they get lucky by finding a buyer with mutual acquaintances that will vouch for them. In agriculture, however, these transactions need to take place very quickly, or suppliers can find themselves saddled with thousands of pounds of crops, like cassava, that have gone bad.
Releaf wants to mimic the interactions that take place on WhatsApp but ensure they go more smoothly by displaying who each business has already worked with, as well as important information like pricing that might otherwise not be mentioned until after several days of back-and-forth.
As members of the Nigerian diaspora, Releaf’s founders say it was important for them to use their education and experience to help Africa flourish economically instead of taking jobs at big tech firms.
“I went to MIT as a mechanical engineer and spent the past two summers at Facebook,” says Udotong. “In my journey, it’s been about finding people who not only share the same long-term vision, but have even written about it in their college essays. We all wrote that we wanted to be part of Africa’s growth story.”
Comment