Introduction:
Maad, a B2B e-commerce startup based in Senegal, has secured $3.2 million in debt-equity funding to support its growth in the country and explore opportunities in the wider Francophone region. Led by Ventures Platform, the seed round also saw participation from Seedstars International Ventures, Reflect Ventures, Oui Capital, Launch Africa, Voltron Capital, and Alumni Ventures. Additionally, Maad raised $900,000 in debt financing from French DFI Proparco and local banks.
Addressing Retailers’ Challenges:
Maad’s end-to-end distribution platform aims to address the challenges faced by informal retailers, such as stockouts and high inventory costs due to multiple layers of dealers. The platform allows these mom and pop stores to source fast-moving consumer goods (FMCG) directly from partner suppliers. By eliminating intermediaries, Maad streamlines the supply chain and provides retailers with access to a wide range of products.
The Journey from Data Collection to B2B E-commerce:
Sidy Niang (CEO) and Jessica Long (COO) initially launched Maad as a data collection provider in 2020. However, they later pivoted to building software that helps companies manage their internal distribution. Seeing how FMCG suppliers utilized the software to overcome distribution challenges inspired the launch of Maad’s B2B e-commerce business in September 2021. Niang explained that witnessing clients derive value from the software motivated them to create a platform that offers even more value by consolidating all the products purchased by small shops.
Efficient Fulfillment and In-House Delivery:
Customers can place orders through Maad’s call center, field agents, or the app. The majority of orders (75%) are made through the app. Maad fulfills these orders from its warehouses and utilizes its in-house delivery service to reduce costs and ensure consistent service. By integrating logistics into their operations, Maad aims to provide reliable services to its clients. Long emphasized that relying on a third-party provider would not allow them to offer a similar level of service due to the low margins in the business.
Exclusive Access and Competitive Pricing:
With a network of 80 suppliers, Maad currently serves 6,500 active retailers. By working closely with suppliers, the startup claims to have exclusive access to certain products, allowing it to offer competitive pricing. This draws informal retailers who rely heavily on these products. Informal retailers play a crucial role in sub-Saharan Africa’s household retail sector, accounting for about 80% of sales due to their proximity to customers.
Data Insights and Financing for Informal Retailers:
Startups like Maad are not only providing a platform for retailers and suppliers but are also collecting valuable data on products and retailers. These data points help suppliers make better business decisions. Additionally, Maad’s platform addresses inventory sourcing and financing challenges faced by informal retailers.
Overcoming Funding Challenges:
Maad’s funding comes at a time when investors are hesitant to support B2B e-commerce businesses in Africa due to thin margins and capital-intensive models. Several entities in the sector have scaled back or shut down. However, Maad believes it has a first-mover advantage in Senegal and plans to expand its coverage to remote areas within the country. It also aims to enter a new market within the Francophone region by the end of the year. Furthermore, Maad plans to introduce a buy now, pay later (BNPL) service, allowing shop owners to access inventory on credit.
Conclusion:
Maad’s innovative B2B e-commerce platform is transforming the retail landscape in Senegal and beyond. By directly connecting informal retailers with suppliers, Maad is addressing key challenges while providing valuable data insights and financing solutions. Despite the funding challenges faced by the sector, Maad’s unique approach and commitment to customer service position it for further growth in the region. As the company expands its coverage and introduces new services, it is poised to continue making a significant impact on the B2B e-commerce industry in Africa.
