Tradedepot raised $110M from International Finance Corporation

Tradedepot raised $110M from International Finance Corporation

After the pandemic paved the way for widespread offline retail and commerce disruption, startups digitizing B2B e-commerce and retail in Africa continue to make headlines.

TradeDepot, a Nigerian and American company that connects consumer goods brands to thousands of retailers and assists with distribution, has raised $110 million in new equity and debt funding. Further, it seeks to open more retail locations and expand its buy now, pay later service across the continent. Though TradeDepot did not comment on the equity-to-debt ratio, information from the company’s SEC filing puts the equity share at nearly $42 million.

The Series B funding comes nearly 18 months after Partech Africa and the International Finance Corporation raised $10 million together (IFC). This time, IFC led the round, with participation from Novastar, Sahel Capital, CDC Group, Endeavor Catalyst, and existing investors Partech and MSA Capital. Arcadia Funds, a lender specializing in P2P and marketplace lending as well as insurance-linked securities, led the debt financing.

Wale Ayeni, IFC’s head of Africa Venture Capital Investment, and Brian Odhiambo, Novastar Ventures’ West Africa director, will join TradeDepot’s board as part of the round.

TradeDepot operates a B2B marketplace that connects small shops, kiosks, and retailers with global consumer brand wholesalers who have access to food, beverages, and personal care products. To carry out distribution, the company owns warehouses and fleets of drivers.

According to CEO Onyekachi Izukanne, the company had more than 40,000 merchants on its platform last year; now, it serves more than 100,000 merchants. During the call, the CEO also mentioned that TradeDepot’s GMV increased by 5x during this period.      

TradeDepot’s main focus over the last five years has been on building out the supply chain with technology and onboarding retailers one at a time. The company now offers a full suite of products to those who have signed up, including digital wallets and financial services, particularly credit or BNPL offerings.

The company’s ShopTopUp platform includes the BNPL product, which offers shops access to a credit line for any consumer goods on the application.

However, TradeDepot, like any other B2B e-commerce platform that offers BNPL services, does not offer cash advances to these merchants. Instead, consumers receive the goods directly and make payments over time. The monthly effective interest rate is approaching 5%.

When the five-year-old company announced plans to offer credit in 2020, it built scoring models by financing credit to retailers with equity off its balance sheets.