Nigerian startup TradeDepot, a B2B e-commerce platform for consumer goods in Africa, has raised US$10 million in a pre-Series B equity funding to expand into other African cities and launch a suite of financial products and credit facilities for its retailers.
Founded in 2016, TradeDepot is an end-to-end distribution platform that aims to connect the world’s top consumer goods companies directly to African retailers. With a network of over 40,000 micro retailers across Nigeria, the startup plans to build the largest retail distribution network in Africa.
In order to help it achieve this, TradeDepot has raised a US$10 million pre-Series B round, which was co-led by Partech, an investor in the startup’s 2018 US$3 million Series A round, International Finance Corporation, Women Entrepreneurs Finance Initiative (We-Fi) and MSA Capital.
The startup will use the new investment to continue its integration of the fragmented informal retail supply chain in Nigeria, expand into other African cities, and launch a suite of financial products and credit facilities to support its retailers. Its network already includes more than 40,000 micro retailers in Nigeria, while it is working with global distributors and manufacturers like Nestlé, Unilever, GB Foods and Danone to make household supplies more accessible and affordable for the informal urban retail networks it operates in.
TradeDepot has recorded considerable growth since its launch, activating a new store every three minutes, and receiving a retailer order every four seconds, on average. The company has also tripled its volume of trade in the last 12 months, growth it expects to continue post-investment.
“We are excited to strengthen our team and welcome on board some incredible strategic investors and partners, as we double down on our mission to digitise and simplify retail distribution for the continent,” said Onyekachi Izukanne, chief executive officer (CEO) and co-founder of TradeDepot.
“Africa’s offline retail market is estimated at US$1 trillion, and this new investment allows us to capture an even greater segment of that market. We will continue to use data to drive efficiencies and provide an easier stock acquisition service for our 40,000+ retailers, driving down costs for them by negotiating even better deals with our global manufacturing partners, whilst simultaneously providing a better, faster route to market for our suppliers.”
In a bid to help retailers grow their businesses, TradeDepot is set to launch a suite of financial products and credit facilities. Many retailers do not have the collateral that banks demand, but by leveraging their trading relationship with TradeDepot, retailers can access the funds they need to buy more goods, scale their businesses and generate more revenue.
Wale Ayeni, Head of Africa Venture Capital Investment at IFC, said TradeDepot was a “rising star” in the African internet landscape, helping digitise a substantial underserved informal retail segment.
“The founders’ vision to build a digital platform that improves the unit economics of serving the mass-market is one that we feel privileged to support,” he said.
More than 75 per cent of the retailers on TradeDepot’s platform are female entrepreneurs, and TradeDepot will offer mentorship and opportunities to link with domestic and global markets to further support its predominantly female customer base to grow and expand their own businesses.
Programme manager Hanh Nam Nguyen, speaking on behalf of IFC as implementing partner of We-Fi, said women play a pivotal role in driving economies across Africa, but lack of access to capital, limited market linkages, cultural norms and other challenges often prevent them from achieving the success they want.
“We-Fi financing will incentivise TradeDepot to build stronger women-led small and medium enterprises (SME) retailer and distributor networks, which will support them to become drivers of economic growth in their communities,” Nguyen said.
Tidjane Dème, general partner at Partech, said his firm was proud to continue its partnership with TradeDepot as they continue their work to transform the huge informal markets that are present in Africa.
“The founders have a wealth of experience that puts them in a great position to execute on their vision, and their approach and results to-date are why we are so excited by the extraordinary entrepreneurs harnessing the power of technology to address issues across the continent,” he said.