African E-commerce Startup Sabi Lays Off 20%, Pivots to Traceable Exports After $38M Raise

African B2B e-commerce startup Sabi has laid off approximately 20% of its workforce, affecting around 50 employees, as it shifts its strategic focus from its original retail platform to capitalize on its expanding commodity exports business.

The company confirmed the layoffs on Thursday, marking a restructuring effort to align resources with the growing demand for traceable, ethically sourced commodities. This pivot builds on the foundation of Sabi’s new vertical, TRACE (Technology Rails for African Commodity Exchange), which launched last year.

Sabi, established in Lagos in 2020, initially provided a software platform to help informal retailers digitize their inventory and sales processes during the COVID-19 pandemic. It subsequently evolved into a fast-moving consumer goods (FMCG) marketplace with embedded finance solutions, expanding its operations across Nigeria and Kenya. By mid-2023, Sabi reported serving over 300,000 merchants and achieving an annualized Gross Merchandise Value (GMV) of $1 billion.

This success enabled Sabi to secure a $38 million Series B funding round, valuing the company at $300 million. However, like many B2B e-commerce startups operating in Africa, Sabi encountered significant challenges, including narrow margins, capital intensity, and difficult unit economics. Despite these headwinds, Sabi maintained an asset-light model and achieved profitability, distinguishing itself from competitors who rapidly depleted their capital reserves. Nevertheless, the shift in market dynamics prompted a strategic reassessment.

In March, Sabi introduced TRACE as a new business line alongside its FMCG operations. TRACE focuses on facilitating mineral and agricultural exports, including lithium, cobalt, tin, and cash crops, where global buyers are increasingly emphasizing transparency, ESG compliance, and traceability.

Sabi reports that it currently exports over 20,000 tons of these commodities each month to buyers located in the U.S., Europe, and Asia. The company has also expanded its operations into the U.S. and appointed senior executives to support its international growth.

“Sabi is entering its next chapter, with a focused commitment to commodity trade and traceability for global customers,” the company stated. “We’re doubling down on the part of our business seeing the most demand, built on the strong foundation we’ve laid since 2021 by supporting African merchants and their growth. To align with this momentum, we’ve made the difficult decision to restructure parts of our team.”

This strategic shift underscores a broader trend in Africa’s informal commerce sector, where platforms are seeking sustainable business models. Sabi’s evolution into an infrastructure provider for global trade demonstrates a potential pathway, albeit one that may involve internal reorganizations.