Nigeria and US-based TradeDepot has announced a new funding round where it raised a total of $110 million. The Series B funding round was led by existing investor International Finance Corporation (IFC) and saw the participation of other investors such as Novastar Ventures, Sahel Capital, CDC Group, Endeavor Catalyst, Partech and MSA Capital. There was also debt funding led by Arcadia Funds, known to be a lender that specializes in peer-to-peer and marketplace lending and insurance securities.
Although TradeDepot did not reveal the share of equity to debt, data from its SEC filing approximates the equity share to $42 million. The Series B funding round comes after about eighteen months after the company raised $10 million in a round co-led by the International Finance Corporation (IFC) and Partech Africa.
TradeDepot connects consumer goods brands to thousands of retailers. It also provides distribution services to these retailers and is looking to increase the number of retail stores it services as well as expand its buy-now-pay-later service across the African continent. Basically, TradeDepot operates a business-to-business marketplace connecting retailers, small shops, kiosks and small businesses with wholesalers. TradeDepot owns its fleet of delivery vehicles and warehouses; all these have contributed to the smooth running of its operations. Wale Ayeni, the head of Africa Venture Capital Investment for the IFC and Brian Odehiambo, the West Africa Director of Novastar Ventures, will join TradeDepot’s board as part of the deal.
In the last year, TradeDepot has recorded tremendous growth. According to its CEO Onyekachi Izukanne, the company is currently servicing over a hundred thousand merchants compared to last year when it was servicing about forty thousand merchants. He also mentioned that the company’s GMV has grown more than five times in the last year.
TradeDepot’s buy-now-pay-later service is available through its ShopTopUp platform. Using the platform, retailers can gain access to credit facilities and finance their purchases. However, instead of providing merchants with cash advances, TradeDepot provides the goods that merchants need. Repayment is done in instalments with an interest rate of almost 5 percent. “Merchants are able to double or triple what they normally buy just because of this access. We think that these embedded financial services will be a key part of this narrative: Supply chain on the one hand, and everything related to financial services to make these businesses work on the other. We think they go together. And the last year and a half have been defined by us focusing on bringing more of these embedded finance products to market”, the company’s CEO said. TradeDepot claims that its buy-now-pay-later has led to an increase of 200 percent in transaction volumes for retail store owners.
With the newly-acquired funds, TradeDepot will scale its operations in the three countries (Nigeria, Ghana and South Africa) where it is currently available. The company plans on leveraging the opportunities that lie in the Nigerian SME space.
