Nigeria’s TradeDepot acquired Ghana’s Green Lion to expand its presence in the African B2B ecommerce sector. That is coming after fintech category-king Flutterwave acquired Disha, a payment ecosystem platform for digital creators. OurPass, a one-click checkout startup, acquired Storemia, a storefront. I can go on but one thing is evident: there is massive liquidity in the African startup space and what that means is simple – harvest period is here. Yes, we will expect many small exits as the big category-leaders begin consolidation.
I have updated my own investment thesis, focusing on niche startups which can deliver that innovation dilemma because a frontal attack does not make sense in some areas. So, you build and position for the leaders to acquire or invest to protect their flanks in some domains. Over time, they swallow.
What this means is that investors have more paths to exit. Yes, you do not have to wait really long because local leaders will like to grow and acquisition is now a big option. They have the funds and can do big deals.
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And you know what? This is a virtuous circle: if they acquire, those innovators magically become rich and will move to build things in other domains, and as that happens, a massive cambrian entrepreneurial moment continues to take place.
The boom in Africa’s business-to-business e-commerce space is starting to lead to consolidation between potential competitors. One example is in west Africa where TradeDepot, a six-year-old Nigerian startup that uses a mobile app to help retailers order consumer goods from manufacturers, announced today (Feb. 23) that it has bought Green Lion, a Ghana-based company in the same line of business.
The deal terms are undisclosed except that it is a full ownership in which Green Lion’s business relationships (with suppliers and customers), staff, and assets will become TradeDepot’s. The latter had started a pilot in Ghana in 2021 to understand the landscape but opted to proceed with an acquisition instead of building from scratch because it was a more efficient expansion strategy, says its CEO Onyekachi Izukanne.
Tekedia Capital next investment cycle begins in days and we’re positioning for opportunities because the harvest period is here, at least for micro-investors.
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