February 2, 2023

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Nigerian startup Taeillo raises funds to expand its online furniture e-commerce platform • TechCrunch

Individuals or companies buying furniture in Africa can shop at local furniture stores or global furniture retailers like IKEA. But both options have pros and cons; For the latter, local furniture stores can lack the quality customers need, while global retailers can not only take several months to ship their products to Africa, but can also be too expensive.

Taeillo, a Lagos-based startup that innovates on these issues of time, quality and cost through its online furniture e-commerce store, has $2.5 million in “expansion” funding from Aruwa Capital, a Nigeria-based early-stage growth capital, raised gender lens funds.

In a statement, Taeillo said it is an alternative for customers who face high furniture import costs (combined with an unstable exchange rate) and endure long waiting times of 3-6 months before the furniture is delivered. “…we offer our customers aesthetically pleasing pieces of furniture at a fraction of the import price and with a 50% reduction in delivery time to around 4-8 weeks,” she continued.

Founded in 2018 by Jumoke Dada, the online furniture retailer sources raw materials from local suppliers and crafts furniture ranging from sofas and beds to chairs and tables, which it sells to consumers and businesses. The company, which is both a manufacturer and a retailer, can be compared to Wayfair and the now-defunct Made.com. However, since it serves a completely different market, Taeillo needed to be authentic with its product offering by incorporating cultural elements (it refers to them as Afrocentric furniture).

When Dada launched the platform, the target group was exclusively companies. The first product raised $165,000 in seed funding from investors including CcHUB Growth Capital, Montane Capital and B-Knight. However, in mid-2020, during the pandemic, Taiello turned to a direct-to-consumer approach, leaning on investor leadership and citing an opportunity in the market after several walk-in stores went out of business.

“It was more or less like preparing for opportunity because back then there were a lot of people at home and the leading furniture brands weren’t online to serve them,” CEO Dada told TechCrunch. “Traditional showrooms have also been closed, so this was an opportunity for brands like us to position ourselves and prove that they can buy furniture online without necessarily having to go to showrooms.”

The decision turned out to be a masterpiece; By the time he came to power, Taeillo had sold fewer than 200 pieces of furniture in Nigeria. Its pivot was the launch of the “Amakisi” table (₦29,999/~$85) – a work table and one of its best-selling products – which quickly gained popularity, selling over 1,000 units in six months. Since then, the online furniture manufacturer and retailer has expanded into 10 more product categories, moved to Kenya and shipped more than 10,000 pieces of furniture to over 5,000 customers in both countries.

In 2021, Taeillo raised a $150,000 bridge round from CcHUB Syndicate as it tripled its earnings from the previous year. But that growth and progress hasn’t been without headaches. Due to the popularity of some of his furniture among Nigeria’s millennial and working-class demographics, Taeillo is struggling to meet demand; On various occasions, it took months for products to be delivered. Though it manages its supply chain to some degree and makes about 70% of its products, the startup also relies on third-party manufacturers to manufacture components before they’re sent to Taeillo’s warehouse, assembled, and shipped to customers. According to Dada, the reasons for the long waiting times – with a monthly production of up to 800 pieces of furniture – lie in the cooperation with these third-party providers, including suppliers and logistics service providers.

“Sometimes, as a modern company, you have to deal with crude oil suppliers. But recently we had to change our suppliers to reduce the time we receive the materials. At the moment, we are also working on strategic partnerships with external logistics companies and may create a logistics arm to help us improve our deliveries,” the CEO said of how Taeillo plans to deal with the long delivery times, while also acknowledging that the Online furniture manufacturers and retailers could also improve production processing.

With the funding, Taeillo intends to reduce delivery times to around 3-5 days by pre-manufacturing some of its best-selling furniture (e.g. the “Amakisi” table) rather than waiting for customers to place orders before starting production. The investment will also help scale the Pay with Flexi product, where buyers can buy furniture and pay in installments; over 200 people have used it. Then there’s augmented reality and virtual reality (AR/VR) technology (which powers virtual showrooms), which the startup plans to double down on in terms of marketing.

“We did a lot of work with less. That’s why we now want to attract outstanding talent who will lead us into the next phase of growth. We also want to increase our market share, streamline operations, hack our supply chain and ensure customers have a great experience,” said the CEO of the online furniture retailer, which had annual sales of over $1 million in 2021.

Adesuwa Okunbo Rhodes, founder and managing partner of sole investor Aruwa Capital, said the investment in Taeillo aligns with one of her firm’s investment goals: supporting startups founded and led by women. Last week, the three-year-old growth equity firm, which is one of the few founded and led by an African woman, closed a $20 million fund from Visa Foundation and other LPs to invest in 10 startups in fintech, Investing in health care and renewable energy and essential consumer goods for the female population.

“In line with Aruwa’s gender-biased investment strategy, Taeillo is founded and led by a woman and has 50% women on the management team,” she said in a statement. “… The enterprise [Taeillo] has maintained its innovative model in a traditional brick-and-mortar industry, creating a unique value proposition for its customers in a fast-growing, underserved market. By leveraging technology across its value chain, Taeillo has been able to achieve exponential growth in less than two years and deliver results that traditional furniture companies take decades to achieve.”