Partech-backed TradeDepot Inc in talks to raise Series B funding

Nigeria-based startup, TradeDepot, a fast-moving consumer goods platform that connects informal retailers to distributors and manufacturers is reportedly in talks to kickstart a Series B funding round.

According to sources familiar with the matter, International Finance Corporation (IFC) is evaluating a bid to invest $10million in TradeDepot to pick up a minority stake in the company. There are indications that the private sector investment arm of the World Bank may increase its commitment to $15million.

In January this year, the Nigerian company with major operations in Lagos and Abuja revealed its plan to expand to other Nigerian cities before the end of 2021. At that time, it was still undecided on the amount needed to facilitate this expansion and said it will arrive at an amount before the end of Q1 2021.

This new investment by the IFC will form part of the company’s series B round and will help accelerate its expansion plans within Nigeria and the rest of the continent. The potential amount the startup intends to raise now cannot be ascertained but it is projected to be around the $25-50 million range.

This development is coming approximately one year after the Nigerian company raised $10 million in what it described as a Pre-Series B round in July 2020. The round was co-led by Partech Africa Fund, IFC, Women Entrepreneurs Finance Initiative (We-Fi), and MSA Capital. It is believed that IFC likely invested $2.9 million in the round.

Two years earlier in 2018, TradeDepot had raised $3 million in a Series A round led by Partech. There is a possibility that IFC had an indirect relationship with TradeDepot during this period as it is a limited partner to Partech’s Africa fund.

First launched in 2016 by Onyekachi Izukanne, Ruke Awaritefe, and Michael Ukpong, TradeDepot has built up a network of 40,000 small businesses in Nigeria and connects them to local distributors of global consumer brands like Nestlé, Unilever, GB Foods, and Danone.

The startup says over 75% of registered retailers on its platform are women. It has also launched an embedded finance product through which informal retailers can access working capital for their purchases on the platform.

Through the company’s mobile app on Android or WhatsApp, USSD shortcode messaging, or toll-free number, retailers can order goods and services and they will be delivered using TradeDepot’s fleet of vans of tricycles. With the app, retailers can make payments, order stock, and manage inventory.

The startup conducts the delivery of products through a fleet of about 265 vehicles leased from independent fleet owners. This allows it to operate a lean structure and cut costs on the purchase and maintenance of vehicles.

In addition, the company runs most of its operations from its existing 800 square meters in Lagos. It also has leased space in other warehouses, which are managed by third-party companies.

Apart from Nigeria, the startup also operates in two African countries namely Ghana and South Africa.

The startup is setting its sight on building the largest retail distribution network in Africa, and this new funding round will be an extra boost to that aspiration.