Maad, a Senegalese B2B e-commerce startup, has secured a significant $3.2 million seed funding round. This investment, led by Ventures Platform with participation from Seedstars International Ventures, Reflect Ventures, Oui Capital, Launch Africa, Voltron Capital and Alumni Ventures., demonstrates strong belief in Maad’s potential to revolutionize the way fast-moving consumer goods (FMCG) reach informal retailers (“mom and pop stores”) across Africa.
The funding structure is noteworthy. It combines $2.3 million in equity investment with an additional $900,000 in debt financing. This debt portion, secured from French DFI Proparco and local banks, allows Maad to invest in critical infrastructure like warehouses and delivery vehicles without immediate strain on cash flow.
This strategic mix of funding allows Maad to:
- Fuel Growth in Senegal: The investment will be used to solidify Maad’s position in Senegal, a market where they may have a first-mover advantage.
- Expand to Francophone Africa: The funding also paves the way for Maad to replicate their success model in other French-speaking African countries, creating a pan-regional network.
Why Investors Are Betting Big on Maad
Several factors likely fueled the investor interest in Maad:
- Addressing a Massive Market Problem: Maad tackles a major pain point for informal retailers in Africa — the inefficient and costly process of obtaining FMCG products. These small stores are the backbone of African retail, accounting for a staggering 80% of household sales in sub-Saharan Africa. By streamlining access to FMCG products, Maad unlocks significant growth potential for both retailers and suppliers.
- Impressive Traction and Sustainable Model: Despite being a relatively young company, Maad has already achieved impressive results. They boast a network of 6,500 active retailers and a monthly GMV of $3 million. Their vertically integrated model, with in-house logistics and warehouses, allows them to offer competitive pricing and reliable service — crucial factors in this low-margin business.
- Data-Driven Approach for Mutual Benefit: Maad leverages data collected across their platform to generate valuable insights for both suppliers and retailers. Suppliers can optimize operations and product development based on real-time data, while retailers benefit from improved inventory management and access to financing options. This creates a win-win situation for all stakeholders in the FMCG ecosystem.
- First-Mover Advantage in Senegal: Maad claims to have a first-mover advantage in Senegal. This could be attractive to investors looking to capitalize on the growth potential in this market before competition intensifies.
Ventures Platform, based in Lagos, Nigeria, invests in African startups tackling non-consumption and infrastructural challenges, with notable investments including Fez Delivery and Paystack. Switzerland-based Seedstars International Ventures supports high-impact entrepreneurs across emerging markets, with investments in companies like Democrance and QuickCheck. Reflect Ventures, which is located in the United States, focuses on B2B and B2B2C startups in emerging markets, particularly in logistics and fintech. Oui Capital and Launch Africa target early-stage startups in Africa, with Oui Capital boasting a diverse portfolio across 22 countries and Launch Africa investing in over 150 startups. French DFI Proparco, a development finance institution, supports private sector projects in developing countries, spanning sectors such as energy and agriculture.
A Deeper Look at Maad: From Data Collection to E-commerce Powerhouse
Maad’s journey began in 2020 when Sidy Niang (CEO) and Jessica Long (COO) launched a data collection service for companies managing internal distribution. However, their focus shifted in September 2021 after witnessing the challenges faced by informal retailers in sourcing FMCG products. This shift in focus led to the creation of Maad’s current B2B e-commerce platform.
Maad’s platform offers a comprehensive end-to-end solution for informal retailers:
- Simplified Ordering: Retailers can place orders through a user-friendly mobile app, a dedicated call center, or via field agents, ensuring maximum accessibility.
- Reliable Warehousing and Delivery: Maad controls its own network of warehouses and delivery services, guaranteeing cost-effectiveness and consistent service for retailers.
- Strong Supplier Relationships: Maad has established partnerships with 80 suppliers, allowing them to offer a wide variety of products and potentially secure exclusive access to certain items.
- Competitive Pricing: By controlling the supply chain, Maad can offer competitive pricing to retailers, further increasing their appeal.
With a strong foundation, a strategic funding mix, and a clear vision for growth, Maad is poised to become a major player in streamlining FMCG distribution across Africa. Their success will not only benefit informal retailers and suppliers but also contribute to the overall growth and modernization of African economies.