Maad, a B2B e-commerce startup based in Senegal, has secured $3.2 million debt-equity funding to bolster its growth in the western Africa country and to explore fresh 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. It raised the $900,000 debt financing from French DFI Proparco and local banks.
Maad’s end-to-end distribution platform enables informal retailers (mom and pop stores) to source fast moving consumer goods (FMCG) directly from partner suppliers, tackling key issues they face, including stockouts and high-cost of inventory brought by multiple levels of dealers.
Sidy Niang (CEO) and Jessica Long (COO) launched Maad in 2020, initially as a data collection provider before pivoting to building software to help companies manage their own internal distribution. How FMCG suppliers utilized the software to deal with distribution challenges inspired the launch of the B2B e-commerce business in September 2021.
“Watching our clients use our software for their own distribution was what inspired us. The software was providing a lot of value and we could imagine much more value if we put all the products that small shops buy on the same platform,” Niang told TechCrunch.
Customers make orders through the startup’s call center, field agents or the app, which accounts for the bulk (75%) of the orders, which are then fulfilled from its warehouses and using its in-house delivery service to reduce cost and ensure consistency of its services.
“We decided to bring all of logistics…the reason that we do that is just it’s a low margin business. We think that this is the way to provide good service and to meet the reliability needs of clients. I don’t think that we would be able to offer a similar service if we relied on a third-party provider,” said Long.
The startup has grown to serve 6,500 active retailers through its network of 80 suppliers, and claims to have reached monthly GMV of $3 million. Maad says working closely with suppliers has enabled it to have exclusive access to particular products and to price items competitively, which draws the informal retailers. These retailers are an important channel for manufacturers to sell products as they deliver about 80% of household retail in sub-Saharan Africa due to their close proximity to customers.
Startups like Maad are also collecting data points on product and retailers to draw insights that help suppliers make better business decisions, while solving inventory sourcing and financing challenges for the informal retailers.
Maad has raised funding at a time when investors continue to shy away from backing B2B e-commerce businesses in Africa due to their thin margins and capital-intensive business model, which has forced entities such as Wabi, Wasoko and MaxAB to scale back, and the likes of Zumi and YC alum MarketForce’s RejaReja to shut down. This is after the sector experienced a funding boom in 2021 and 2022.
The startup, which claims to have a first mover advantage in Senegal, now plans to expand its coverage to include remote places within the country, and is keen on entering a new market within Francophone regions by the end of the year. It also plans to introduce buy now, pay later (BNPL) service to enable shop owners to access inventory on credit.