TradeDepot up against a crowded field of competitors
By Jeph Ajobaju, Chief Copy Editor
TradeDepot, a Nigerian e-commerce and fintech startup, has raised $110 million in a Series B funding round to support credit services to five million Small and Medium Enterprise (SME) retailers and expand across Africa.
TradeDepot, founded in 2016, raised $10 million in 2020 and its new cash will help it further connect international brands to small businesses on the continent.
But, to remain in black, it has to compete well in a crowded field of fintechs that include Flutterwave, Chipper Cash, Kuda Bank, Opay, Tangerine, et cetera.
TradeDepot offers through its ShopTopUp platform a broad range of consumer goods to SME retailers in its network and provides credit lines to enable them access inventory and pay in installments as they sell on to their own customers.
Disrupt Africa reports that TradeDepot operates in 12 cities in Nigeria, Ghana, and South Africa, and leverages data, technology, and logistics to connect retailers with suppliers.
It unlocks financing to fund inventory purchases for retailers, enabling increased sales, higher margins, and other value-added services for all parties.
The $110 million equity round was led by the International Finance Corporation (IFC), with participation from Novastar, Sahel Capital, CDC Group, Endeavor Catalyst and existing investors, Partech, and MSA Capital.
The debt funding was led by Arcadia Funds.
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Continental expansion dream
The funding will expedite delivery of buy-now-pay-later service to more retailers, increasing penetration for consumer goods brands and driving prosperity in one of the continent’s most critical sectors.
“We remain super focused on making digital commerce and financing both accessible and affordable to neighbourhood retailers across key cities in Africa,” said Onyekachi Izukanne, TradeDepot co-founder and Chief Executive Officer.
“We are delighted to be joined by an elite group of new investors and have IFC’s Wale Ayeni and Brian Odhambo of Novastar joining our board of directors, to support us on this journey to drive growth and prosperity across the continent.”
TradeDepot has built a network of leading consumer goods brands and SME retailers across Africa, and created a proprietary risk scoring engine that uses retailers’ purchase history, previous repayment performance, and other related data points to predict their creditworthiness.
This financing model coupled with industry-leading technology to support logistics operations has led to a 200 per cent increase in transaction volumes for retail store owners.
“The informal sector is a large and critical part of Africa’s economy, accounting for around 80 per cent of jobs in the region,” said IFC Managing Director Makhtar Diop.
“We are excited to work with TradeDepot to leverage technology to help small businesses across the continent, particularly the many retailers led by women, access the resources they need to grow and scale.”