Chpter, co-founded by Tesh Mbaabu, is pioneering social commerce in Kenya by providing a platform that automates sales, marketing, and payments through social media channels like WhatsApp and Instagram. With a $1.2 million funding boost, Chpter seeks to overcome cart abandonment challenges faced by MSMEs and aims to expand into new markets. The company operates on a subscription-based model and leverages technology to enable seamless customer engagement and transactions for businesses.
Kenya’s social commerce market, particularly popular among micro, small, and medium-sized enterprises (MSMEs), is still underutilized despite a large social media user base. Many e-commerce businesses encounter high cart abandonment rates when directing users away from their social platforms. Addressing this, MSMEs have the opportunity to facilitate purchases without leaving social media, embodying the essence of social commerce.
Chpter, co-founded by Tesh Mbaabu, aims to capitalize on this trend by providing a platform that automates conversations, marketing, and payments on WhatsApp and Instagram. Unlike traditional retailers, Chpter does not sell products directly. Instead, it offers technology for businesses, acting as an intermediary that handles customer orders, payments, and engagement without operating as a marketplace.
Mbaabu stated, “In Africa, e-commerce is projected to reach over 500 million shoppers by 2025. Social media platforms such as WhatsApp, Instagram, Facebook, and TikTok have transformed into thriving online shopping hubs where a significant amount of buying and selling takes place.” Chpter enables businesses to transition social media from a marketing tool to a comprehensive sales channel.
With mobile penetration in Kenya exceeding 130% and social media users spending over three hours daily, social commerce presents tremendous prospects. The concept of converting social engagement into sales has moved into active market expansion. Following a $1.2 million pre-seed funding round in September, Chpter is scaling its technology and eyeing expansion into markets like Egypt and Nigeria.
Investors see substantial potential in Kenya’s social commerce sector. The pre-seed funding round was led by Pani, an investment firm co-founded by Ken Njoroge. Other backers include Plesion Capital, Techstars, Norrsken, Renew Capital, ViKtoria Ventures, and angel investors such as Nala CEO Benjamin Fernandes and Workpay co-founders Paul Kimani and Jackson Kibigo.
Chpter previously participated in the Norrsken Accelerator and gained mentorship through Safaricom’s Spark Accelerator, enhancing its operational scaling. While details on Norrsken’s investment remain undisclosed, the training provided by Safaricom was pivotal in developing its capabilities.
Startups like Chpter focus on customer acquisition and market penetration initially, delaying profitability pursuits. Mbaabu expressed, “Yes, we do have plans to raise more funding, but we are prioritizing profitability before seeking the next round of growth capital.” Chpter employs a hybrid revenue model through subscriptions and transactional charges.
The subscription fees charged by Chpter are structured as follows: $50 for small businesses, $120 for medium-sized ones, and $550 for enterprises. In addition, it earns revenue from AI-powered customer interactions and facilitates outbound WhatsApp marketing messages as a Meta Business Partner, creating further income avenues for businesses.
Mbaabu highlighted, “We have built a self-service platform that allows businesses to register for a free trial, connect their social media accounts, and immediately start benefiting from our technology.” Chpter is dedicated to establishing itself as the foundational infrastructure for social commerce, with its future success hinging on widespread adoption and customer engagement. As social media platforms evolve into digital storefronts, the race is on to control the technology that drives this growth.
Chpter is poised to transform Kenya’s social commerce by enabling businesses to engage customers effectively within popular social media platforms. With significant investments and a clear growth strategy, Chpter aims to capitalize on the booming e-commerce landscape in Africa. By facilitating seamless transactions and enhancing customer engagement, Chpter is at the forefront of reshaping how social media is utilized for commerce, indicating strong potential for future expansion and success within the industry.
Original Source: www.techinafrica.com
