Maada B2B e-commerce startup based in Senegal, has secured $3.2 million in equity debt financing to boost its growth in the West African country and explore new opportunities in the wider Francophone region.
The seed round was led by Ventures Platform, with participation from Seedstars International Ventures, Reflect Ventures, Oui Capital, Launch Africa, Voltron Capital and Alumni Ventures. Raised $900,000 in debt financing from French DFI Proparco and local banks.
Maad’s end-to-end distribution platform enables informal retailers (mom and pop shops) to source fast moving consumer goods (FMCG) directly from partner suppliers, addressing key issues they face including inventories and high inventory costs that caused by multiple levels of agents.
Sidy Niang (CEO) and Jessica Long (COO) launched Maad in 2020, initially as a data collection provider before turning to building software to help companies manage their own internal distribution. How FMCG suppliers used software to address distribution challenges inspired the launch of the B2B e-commerce business in September 2021.
“Watching our customers use our software for their own distribution is what inspired us. The software provided a lot of value, and we could imagine a lot more value if we put all the products that small shops buy on the same platform,” Niang told TechCrunch.
Customers place orders through the startup’s call center, field agents or the app, which accounts for the majority (75%) of orders, which are then fulfilled by its warehouses and use the company’s in-house delivery service to reduce of costs and ensuring the consistency of its services.
“We decided to bring in all the logistics… the reason we’re doing that is just that it’s a low-margin business. We believe this is the way to provide good service and to meet customers’ reliability needs. I don’t think we could offer a similar service if we relied on a third-party provider,” Long said.
The startup has grown to serve 6,500 active retailers through its network of 80 suppliers and claims to have reached a monthly GMV of $3 million. Maad says working closely with suppliers has enabled her to have exclusive access to specific products and price items competitively, which attracts informal retailers. These retailers are an important channel for manufacturers to sell products as they deliver 80% household retailing in sub-Saharan Africa due to their close proximity to customers.
Startups like Maad also collect data points on products and retailers to derive insights that help suppliers make better business decisions while solving inventory sourcing and financing challenges for informal retailers.
Maad raised the funding at a time when investors are still shying away from backing B2B e-commerce businesses in Africa due to thin profit margins and a capital-intensive business model, which has forced entities such as Wabi, Wasoko and MaxAB to downsize and the likes of Juice and YC alum MarketForce RejaReja to close. This is after the industry experienced an economic boom 2021 and 2022.
The startup, which claims to have a first-mover advantage in Senegal, now plans to expand its coverage to include remote parts of the country and wants to enter a new market in French-speaking regions by the end of the year. It also plans to introduce buy now, pay later (BNPL) service to allow shop owners to access inventory on credit.
