“Everyone continually tries to build their own pipe, but it’s inefficient and the system is broken right now. That’s the problem we’re trying to solve.” – Onyekachi Izukanne, CEO & Co-founder, Trade Depot.
Prior to co-founding TradeDepot, he successfully co-founded and bootstrapped a technology consulting practice known as C2G Consulting which became West Africa’s leading SAP Partner in 2013.
In the fourth episode of the Building From Ground Up series put together by the UK-Nigeria Tech Hub in partnership with TechCabal, Onyekachi Izukanne talks about the journey to building Trade Depot, a digital platform that serves over 40,000 micro retailers, with his two co-founders.
How it started
While in talks with bigger consulting firms who wanted to acquire CGC consulting, Onyekachi and his fellow co-founders came to the realization that all they had was a service business and there was no product.
He said, “We made a decision that we were going to build a product company. It needed to be solving a massive problem. The problem had to be big enough for it to be worthwhile.”
To decide on what problem to solve, they looked inwards.
“In the eight years, leading up to that time, we had done projects for about 10 or 11 different major FMCG companies. So we were really experienced in that space. In 2015, coincidentally, we were working on three projects at the same time. The companies were in three industries: dairy, pharmaceutical, and third-party logistics. They were separate clients but they worked with the third-party logistics company.”
“We realised that they all needed the same thing: finding a better way to connect retailers to factories. And that’s what we’ve decided to do at TradeDepot.”
“Our focus is to build that single pipe for any manufacturer of consumer goods, but also anything else can flow through that pipe.”
Getting its first customers
Talking about how TradeDepot found its first customers, he said, “Our first customers were some of our already existing consulting clients. Clients we knew had this problem. So there was an opportunity to say, in addition to what we were already doing for you now, there’s this side thing we put together that we think can help deal with this problem.”
He explained further that because there were two sets of clients they had to get: the supply side [manufacturers] and the demand side [retailers], the idea was to give suppliers value first to make them stay, then hunt for the demand side.
“The supply side is always the bigger issue to figure out, so we leveraged the existing clients we were working with.”
In July 2020, TradeDepot raised $10m in equity, with investors including Partech and the International Finance Corporation. Looking back at the early days of seeking funding, Izukanne explained that for the first round they were looking for someone they could work with and who was not too choosy.
He said, “It’s also useful to think about the next round when you’re having that conversation because you want people that are able to help you do the round after this one. You need to remember also that the investor has an objective. They’ve raised money from someone else. They have a number of years to multiply that money. That’s the bottom line for them.”
“Ultimately they want to know that even if you’re not profitable or making much revenue now, you have enough in your story to demonstrate that 3 million given now would be worth 9 million in 18 months.”
The primary channel TradeDepot utilized to reach investors was its network. He said that they once used an investment advisor in Europe to help them connect with other investors. While it didn’t ultimately result in a transaction happening, it was something they explored as well at that time.
When asked about what changed after he transitioned from full-time consultant to practitioner, he quickly pointed out that their business had gotten many things wrong the first time around.
Now, they are working on getting better at discovering their gaps early enough.
“Many times we don’t have enough data but we have to make decisions, so we tell ourselves to take these decisions as an experiment. Before you can get to the point where it’s taking you completely off course, you’ve quickly realised that this is not the right direction.”
“My co-founder Ruke would often say, ‘ready, aim, fire’, and often it’s like that. You need to be open to trying multiple things at the same time, embracing the fact that many of the things you’re trying are not going to work. And when that happens, be bold enough to course-correct immediately.”
Meet the team
Izukanne, speaking about his co-founders, said “Ruke, Michael and myself have been building stuff together now since 2002. Every venture I’ve worked on since I left school, the three of us did it together.”
“Having been together for that long, I think it’s probably the main ingredient in our secret sauce.”
Since TradeDepot was set up in 2016 its presence has mostly been felt in Lagos state and Abuja. But now its priority is to expand to 10-15 major cities, with the aim of covering all Nigeria’s major cities by the end of 2021.
According to Izukanne, if he could go back to tell his former self one thing, it would be, “it’s not going to get any easier.”
“I’ll also tell myself to embrace making those mistakes and just focus on learning very quickly from them.”
The Building From Ground Up series is powered by the UK-Nigeria Tech Hub in partnership with TechCabal. For more information on the series, you can follow the UK-NG Tech Hub on Instagram, Twitter and LinkedIn.