Last month, Nigerian startup TradeDepot, an innovative SaaS platform for fast moving consumer goods (FMCG) distribution in Africa, became the first recipient of funding from Partech Ventures’ recently launched Africa Fund to expand in Nigeria and launch in other countries.
The US$3 million funding round marks a significant milestone for TradeDepot, which was founded in 2016 by Michael Ukpong, Onyekachi Izukanne and Ruke Awaritefe, and has developed a 360° solution integrating all participants in the trade value chain – manufacturers, distributors and retailers.
It has been already been adopted by first rank FMCG companies and deployed across Nigeria in distributors’ warehouses, with the startup now planning on expanding its client base at home and abroad on the back of the invesment.
Through TradeDepot’s platform, small retailers have a real time view of all prices and discounts available from every major brand.
“They can directly order products, which are then delivered to them as the order is routed to the appropriate nearby depot,” said co-founder Izukanne, who is also the startup’s chief executive officer (CEO).
“At the same time, manufacturers have full visibility over their distribution and can leverage the platform to optimise deliveries to their distributors, improve their pricing and have a direct channel towards their end-retailers.”
The three co-founders have a strong track record, having jointly founded and worked together at three startups over the past 15 years.
“Our first venture was an IFC-funded ed-tech startup, after which we founded a technology consulting company that we grew to become one of the leading SAP consulting houses in West Africa with over US$40 million earned in revenues,” Izukanne said.
Within the technology consulting business, while deploying enterprise supply chain solutions for various large consumer packaged goods (CPG) companies in West Africa, including Cadbury, Coca Cola Hellenic, and the UAC Group, the team became familiar with the bigger problem these companies had with managing their route-to-market and getting their products to retail.
Thus, TradeDepot was born, and it has experienced relatively instant success.
“Our goal is to build the fabric of trade between CPG companies, their distributors, and millions of small and mid-size retail stores across Africa,” Izukanne said.
“Several of our existing clients are multinational companies and already have rollout plans in place to deploy the platform for their businesses in other markets across Africa over the course of the next 18 months.”
That said, the startup’s immediate focus is still the Nigerian market.
“We are aggressively focused on growing our retail coverage in Lagos and in other regions across the country, and this round of funding will help drive this objective. We expect to significantly grow our retail coverage in key regions in Nigeria by the end of this year,” said Izukanne.
“We work with six CPG companies in Nigeria, including Promasidor, Coca Cola, and Population Sciences International. We have also signed up several distributors, including the numer one third party logistics provider in Nigeria MDS Logistics, whose 50 depots all around the country have been integrated onto the platform.”
This significant customer base saw TradeDepot increase revenues by around 400 per cent between 2016 and 2017, but Izukanne said getting to this point had been a challenge for the startup.
“Our target market on the retail end comprises lots of small and unsophisticated informal retailers for whom adopting technology is often a big ask. We however consider this a feature not a bug, and have built with these constraints in mind. For instance, in lieu of expecting these users to raise their orders using mobile apps we have rolled out alternative channels via things like USSD that the users can access to trigger the process,” he said.
“In addition, a lack of actual trade and consumer data was – and remains – a challenge for proper planning, but we increasingly see this as a massive opportunity that the platform we are building positions us to exploit.”