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VC firm looks to disrupt SA’s R5bn retail grocery market

By Chris Tredger, ITWeb Africa editor.
Johannesburg, 12 Feb 2024
Jonathan Holden, COO of SOLmate.
Jonathan Holden, COO of SOLmate.

Multi-stage venture capital company Skywell Capital Partners has established two digital platforms, SOLshop and SOLmate, in a bid to disrupt South Africa’s retail grocery market, which it claims is estimated to be worth R5 billion.

Its group buying app, SOLshop, established in late 2022 and run by a team of twenty, provides Africa’s small-scale farmers and food producers with access to buyers in Gauteng. It taps into the social commerce trend, enabling traders to reduce the cost of bringing products to market, as well as helping consumers get better prices thanks to group buying.

The digital wallet facility SOLmate is a sister business that is run independently. Users receive an account number and linked debit card powered by Mastercard, which can be used to shop online or as a mobile money payment/receipt service.

SOLshop is currently only available in the Gauteng province, but there are plans in place to expand regionally, says Jonathan Holden, COO at SOLshop.

The platform is reliant upon the success of social e-commerce, a business model that Holden believes does work.

He explains that social buying platforms enable individual consumers to coordinate purchases and benefit from group discounts. Farmers, on the other hand, can reduce costs by forming collectives. In this way their products do not have to pass through as many intermediaries, such as wholesalers, specialist distributors, packing companies, logistics companies, and storage facilities.

“Farmers or producers are invited to contact our buying department. A discussion is then held around what they can offer and what sort of volumes would be critical to ensure they can sell at the best price. If the partnership fits, the supplier is then able to list their products and brand their section of the app,” says Holden.

The SOLshop app has been downloaded 100 000 times, and 50 partners have signed up with the business.

“Being a startup, our share (of the market) is small, but we know there is an opportunity to make a meaningful impact in this space. In the short term, we are looking to grow our customer base exponentially and ensure our retention is high. We are looking to grow our supplier base equally aggressively to bring better deals and widen our product range,” says Holden.

Holden says the platform has long-term plans around gamification and expansion in Africa. “We will look to expand into other provinces and potentially move to other countries, but for now, our focus is on South Africa.”