TradeDepot, the leading B2B eCommerce and embedded finance platform in Africa, has raised $110 million in an equity and debt funding round to support the delivery of Buy-Now-Pay-Later services to 5 million SME retailers.
This is meant to drive further expansion of its merchant platform across the continent.
The Series B equity round was led by the International Finance Corporation (IFC), a member of the World Bank Group, 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.
Speaking on the new funding, CEO and co-founder of TradeDepot, Onyekachi Izukanne, 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.”
Izukanne disclosed that 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 per cent increase in transaction volumes for retail store owners, he added.
IFC’s managing director, Makhtar Diop, said the informal sector is a large and critical part of Africa’s economy, accounting for around 80 per cent of jobs in the region, adding that, “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.”
Africa’s SME retailers generate $1 trillion in sales annually and contribute $2.6 trillion to the continent’s nominal GDP, but a fragmented distribution network and lack of access to financing has led to inefficiencies in distribution and many missed opportunities across the value chain.
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.