Startups digitizing B2B e-commerce and retail in Africa continue to grab the headlines after the pandemic paved the way for widespread offline retail and commerce disruption.
TradeDepot, a Nigeria- and U.S.-based company that connects consumer goods brands to thousands of retailers and help out with distribution, has raised
The Series B funding is coming almost eighteen months after raising
A TradeDepot warehouse
However, just as any B2B e-commerce platform offering BNPL services, TradeDepot does not provide these merchants with cash advances. Instead, it sends the products directly to them while they pay in instalments. The repayment value stands at almost 5% per month.
“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,” said the CEO. “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.”
In 2020 when the five-year-old company announced plans to offer credit, it built scoring models by using equity to finance credit to the retailers off its balance sheets. The company claims its BNPL model has led to a 200% increase in transaction volumes for retail store owners.
It’s on the back of track of lending to these retailers (looking into their purchase history, previous repayment performance and other related data points to predict their creditworthiness) for 18 months that TradeDepot is setting up a debt structure to execute at scale.
A large majority of small and medium-sized businesses in Nigeria and across Africa are offline. These businesses generate \)">1 trillion in sales annually and contribute TradeDepot, a Nigeria- and U.S.-based company that connects consumer goods brands to thousands of retailers and help out with distribution, has raised
The Series B funding is coming almost eighteen months after raising