The news
- Jumba, a Kenyan marketplace for construction materials, has closed a $4.5 million seed round.
- LocalGlobe led the round.
- The startup plans to use the raise to acquire more customers in Kenya before it expands into other markets.
Jumba's $4.5 million seed is coming a year after its $1 million pre-seed. This time, however, the round was led by LocalGlobe, while Enza Capital, which led the pre-seed round, participated in the funding alongside other investors such as Foundamental, Seedstars International Ventures, Logos Ventures, SpeedInvest, and First Check Africa.
Founded by Kagure Wamunyu and Miano Njoka, the startup helps retailers of construction materials and estate developers secure construction materials without hassle.
The startup recorded a tremendous increase in the past year, and per TechCrunch, it claimed to have recorded three times quarterly growth at the close of last year.
It currently covers 60% of Kenya's 47 counties and is scaling up its operations to meet the growing demand for its services. The CEO said, the company is "growing very fast, and our problem has always been that we have way more demand than we can meet."
Initially serving only retailers of construction materials, the co-founders began to supply construction materials to estate developers. The volume of demand made them realise Jumba could serve both retailers and developers.
Could we see more construction tech startups in Africa?
In 2020, Africa's construction market was valued at $5.4 billion, and with a housing deficit in most parts of the continent, that number is expected to rise fast.
With such numbers, the sector is ripe for tech disruption. The value of construction projects in Africa as of 2020 was $339 billion, a decline from $497 billion in 2019.
In 2022 another construction tech company in Nigeria — CutStruct —closed a $600,000 pre-seed round to ease the procurement of building materials in the country.
While creating what seems to be a marketplace for construction materials appears to be just another eCommerce but for construction materials, the Co-founders of CutStruct, John Oamen and Tayo Odunsi, explained that sourcing for these materials is complex.
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Estate developers have to reach out to suppliers and manufacturers to negotiate price, test quality, and ensure the materials are delivered safely. The whole process increases the amount spent on building materials by 30%.
If more tech startups enter Africa's construction market, we could see a more permanent solution to Africa's housing problem than what most proptech startups have offered.
Featured image source: TechCrunch
