It’s no longer news that digital retail startups are increasingly gaining traction in the Tech ecosystem in Nigeria, safe to say retail Startup in Nigeria is the next big thing after Fintech.
Alerzo, Ibadan-based retail startup, disrupting the Mom and pop shop model of business announces a $10.5 million series A round led by London-based Nosara Capital. FJ Labs and several family offices from the U.S., Europe and Asia, including Michael Novogratz, participated in the round and joining the list of startups that have received funding in 2021.
The rounds so far
According to TechCrunch, Alerzo has had a couple of funding since it was launched officially. The total fund rounding to more than $20 million. The Ibadan-based retail startup had early investors, the likes of Baobab Network, an Africa-focused accelerator based in London, and Signal Hill, a Singapore-based fund manager that participated in its first $5.5 million seed round last year. The B2B e-commerce company also said it closed a $2.5 million working capital to build facility to serve its customers.
Alerzo was founded by Adewale Opaleye back in 2018 as a last-mile distribution platform that helps Informal retailers stock inventory directly from manufacturers. It later launched as a full scale business in 2019. Alerzo is focused on helping street-side vendors and shops in Nigeria’s south-western cities access household supplies quicker and efficiently.
Opaleye’s vision was to empower the millions of women who are the backbone of consumer commerce in Nigeria’s $100 billion informal retail sector.
The need to solve this problem stemmed from observing firsthand the challenges his mom faced while operating two mom and pop shop.
“Growing up in Ibadan, I watched my mother operate two informal retail stores to raise my three siblings and me. Seeing the many challenges she faced running her stores, and I decided to start a business that uniquely catered to the needs of retailers just like her,”
He noted a few challenges centred around the retail business including Ineffective distribution system that results in inconsistent inventory availability, obscure pricing and limited access to formal financial and banking services.
Talking about why he started off the startup in Ibadan, Opaleye mentioned that Ibadan was the ideal market to establish its headquarters because informal retailers in the region experience these challenges more than those in Lagos. The company is however doing well penetrating the brown roof city as the major digital retail startup in Nigeria
Seed investor Kevin Jung of Signal Hill, while commenting Alerzo’s focus on the informal retail market outside Lagos as one of the reasons why he backed Alerzo earlier on. He also referred to the company’s orientation toward Asia (a playbook Opaleye adopted when he went to China for studies in 2016), as the best reference point for the emerging business model of digitizing informal retail markets
What you should know about Alerzo
In an interview with TechCrunch Alerzo claims to have built up a network of up to 100,000 small businesses, 90% of which are women-led. The company exclusively serves the country’s tier-2 to tier-4 cities in Southwest Nigeria — Ibadan, Ekiti and Abeokuta, to name a few. It connects retailers to local and multinational distributors of consumer brands, like Unilever, Nestlé, Procter & Gamble, Dangote, and PZ.
“Without Alerzo, these retailers need to take a day off from the store to visit a central market, pay for transportation and haul a large amount of inventory back to the store. Alerzo replaces this stressful experience by not only reducing costs and time spent running a retail shop but also improving the livelihood of these working women,”
You should know that about one-third of the total retailers on Alerzo use the platform monthly. Retailers can order products via SMS, voice and WhatsApp and deliver them to their stores in less than 10 hours. The company claims to have processed over 1 million orders this past year.
Alerzo owns and operates its full-stack digital supply chain and logistics to process these orders. The company provides warehousing and fulfillment solutions to suppliers and storefront delivery to informal retailers. It currently owns over 200 vehicles and 20 warehouses to serve its thousands of customers.
Alerzo has an office in Singapore, which serves as it’s regional hub. To expand its digital footprint, the company recently launched an office in Lagos.
The Series A round will be used to expand the Ibadan-based retail startup across Nigeria, especially the northern region. There’s also plans to launch AlerzoPay, the company’s cashless payments and lending platform, as well as a portfolio of new business support services.