Nigerian B2B eCommerce platform TradeDepot, which recently expanded its range of financial services, has raised $110 million in an equity and debt Series B funding round.
The fund will support delivery of the Buy-Now-Pay-Later (BNPL) service to 5 million SME retailers across Africa, and will assist in the expansion of its merchant platform.
IFC, a member of the World Bank Group, led the equity round that was joined by Novastar, Sahel Capital, CDC Group and Endeavor Catalyst.
The debt funding was led by Arcadia Funds.TradeDepot, founded as a consulting firm in 2005, pivoted into a product-led startup in 2016 to aid seamless milk distribution across Nigeria.
Today the platform is connecting consumer goods brands in Africa directly to a target market of several million retail outlets.
The World Bank estimates that, SMEs represent about 90% of businesses and more than 50% of employment worldwide.
In Africa, SME retailers generate $1 trillion in sales annually and contribute $2.6 trillion to the continent’s nominal GDP. But these numbers are only a tiny representation of the sector’s true potential and can’t solve the problem of fragmented distribution networks and lack of access to financing.
Through its ShopTopUp platform, TradeDepot is solving two major problems. First, the company is enabling retailers to get the goods they need on credit. Second, it is allowing them to purchase those goods at a 5% monthly rate.TradeDepot, which has already scaled to include over 100,000 merchants on its platform in 10 cities in Nigeria, Ghana, Johannesburg and South Africa, says the additional funding will help it accelerate its expansion into new markets.
Speaking about the new funding, Onyekachi Izukanne, CEO and co-founder of TradeDepot, said, “We remain super focused on making digital commerce and financing both accessible and affordable to neighbourhood retailers across key cities in Africa. 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.”
“The informal sector is a large and critical part of Africa’s economy, accounting for around 80% of jobs in the region,” said Makhtar Diop, IFC’s Managing Director.
“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.”
The digitisation of SMEs continues to make headlines in Africa this year as startups in the sector like Nigerian Alerzo, Omnibiz, and Sabi have both raised big institutional funding to capture more market share.
Similarly, in Northern Africa, Egypt-based Capiter and Appetito, and Morocco-based Chari are also scaling for more market share across the continent.
It’s a large market, and there are millions of informal businesses that predominantly function offline. But, TradeDepot, wants to capture more than 5 million SMEs as it continues to leverage and expand its BNPL offering in the 12 cities it’s currently operating in.