Kenya’s Sky Garden Plots Resurgence With New Backing After Dire Wobble
After facing near-closure last year, Sky.Garden, a Kenyan e-commerce startup, has risen from the brink under the ownership of Lipa Later, a company that provides digital credit. Following Lipa Later’s reported fresh investment of KES 250 M (~USD 1.6 M), Sky.Garden is being revitalized with ambitious objectives aimed at connecting 100,000 merchants within the coming year.
The revamped Sky.Garden now boasts a comprehensive suite of enhancements, including integrated payment solutions, logistical support, robust marketing tools, and invaluable business insights. This strategic overhaul seeks to empower merchants by providing them with access to financing, real-time transaction monitoring, direct bill payments, seamless deposits and withdrawals through mobile money service M-Pesa or bank accounts, along with the convenience of opening a bank account.
Lipa Later, renowned for its Buy Now Pay Later (BNPL) service that allows shoppers to make purchases through instalments, is integrating its model into Sky.Garden’s platform. This integration enables customers to utilize Lipa Later’s flexible and affordable payment plans for purchases made on the Amazon-style marketplace.
The reinvigorated venture is not stopping at traditional e-commerce but is venturing into social commerce as well. Sky.Garden aims to introduce a seamless shopping experience where consumers can discover, share, and buy products directly within their social networks. Simultaneously, for merchants, this transition means reduced reliance on direct online interactions, allowing sales opportunities from any location, at any time.
Eric Muli, CEO of Lipa Later Group, expressed the group’s broader vision to catalyze commerce across Africa, emphasizing the significance of local ownership and operations in understanding community needs and contributing to national prosperity.
Sky.Garden’s potential path to resurgence marks a remarkable turnaround from its previous struggle for survival. After failing to secure financing last year, Lipa Later’s acquisition injected fresh energy and resources into the platform that had previously raised over USD 6 M before the acquisition.
This development comes on the heels of Lipa Later’s recent milestones, including securing approval to raise funds from the public in the United States, a rare feat for African companies. Additionally, the tech credit platform successfully closed a KES 500 M (~USD 3.2 M) debt issue, supported by strategic advisors Rubicon Landing and legal counsel KN Law.
At its best, Sky.Garden, a notable name particularly in cities like Nairobi, pledged swift deliveries within 24 hours for goods purchased on its platform. However, details regarding the company’s revenue remain opaque, leaving uncertainty about its growth or decline trends over time.
The challenges of achieving scale and profitability in the e-commerce landscape are evident. In Kenya, Sky.Garden directly competed with Jumia, Africa’s largest e-commerce marketplace listed on the NYSE, which despite a decade since its inception, continues to grapple with a struggle for profitability. This struggle is reflective of the broader scenario in African e-commerce, despite reports indicating increased adoption.
While entities like Jumia demonstrate growth in revenue, customer base, and basket value, the reality is that e-commerce platforms in Africa face considerable financial demands. Challenges encompass consumer and merchant hesitancy in pre-payment and card usage, leading most platforms to incorporate cash-on-delivery options, albeit less efficient and laden with complications.
Furthermore, the absence of a dependable national courier service necessitates most e-commerce companies to establish costly in-house dispatch teams, adding to operational expenses. These overarching challenges have significantly influenced Sky.Garden’s trajectory, casting light on the prospective difficulties smaller startups in the same niche might encounter in the foreseeable future.
