TradeDepot secures $110m funding to expand platform in Africa

TradeDepot, one of Africa’s leading B2B eCommerce and embedded finance platforms has raised $110 million in an equity and debt funding round to support the delivery of Buy-Now-Pay-Later services to five million SME retailers and drive further expansion of its merchant platform across the continent.

The Series B equity round was spearheaded by the International Finance Corporation.

In a disclosure made available by TradeDepot to Business A.M., the company stated that the funding and debt financing round was steered by Arcadia Funds with participation from Novastar, Sahel Capital, CDC Group, Endeavor Catalyst and existing investors, Partech and MSA Capital. It also said the new funding will support the expansion of the innovative merchant platform into new cities.

With Africa’s SME retailers contributing $2.6 trillion to the continent’s GDP and generating $1 trillion in annual sales, a fragmented distribution network and lack of access to financing has led to inefficiencies in distribution and many missed opportunities across the value chain. However, the company has said it will offer a broad range of consumer goods to SMEs retailers within the network through its ShopTopUp platform while providing credit lines to enable these retailers to access inventory and pay in installments as they sell on to their own customers.

Consequently, the new funding will expedite the delivery of this service to more retailers, increasing penetration for consumer goods brands and driving prosperity in one of the continent’s most critical sectors. With active operations in 12 cities across Nigeria, Ghana and South Africa, TradeDepot leverages its data, technology and robust logistics operations to connect retailers with suppliers and unlock financing to fund inventory purchases for retailers, enabling increased sales, higher margins and other value-added services for all parties.

Onyekachi Izukanne, co-founder and chief executive officer, speaking on the new funding 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.”

Also, representing the IFC, a member of the World Bank Group, Makhtar Diop, managing director at IFC said: “The informal sector is a large and critical part of Africa’s economy, accounting for around 80 percent of jobs in the region. 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.”

Meanwhile, since launch, 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 game-changing financing model coupled with industry-leading technology to support logistics operations has led to a 200 percent increase in transaction volumes for retail store owners.