Omnibiz, a Nigerian B2B e-commerce company, has recently secured a $15 million pre-Series A investment led by Timon Capital. The raise is structured as a $5M equity and $10M debt investment deal and saw participation from Ventures Platform, Lofty Inc, Chapel Hill Denham, Chandaria Capital, and Musha Ventures.
Present in over 12 cities in Ghana and Nigeria, Omnibiz provides retailers with a fully integrated digital platform. Retailers can purchase and restock conveniently from over 200 product brands, such as Coca-Cola and Nestle, through the Omnibiz app.
The fund was raised to begin further regional expansion, starting this month. Rustagi said the company wants to expand to second-tier cities in Nigeria like Ilorin, Asaba, and Akure, where retail is growing. He added that there is no support in these cities and so, they see huge potential there. Omnibiz wants to become the primary B2B operating system for informal retailers in these cities by helping with last-mile delivery, procurement, working capital, inventory management, and operational tools for tracking sales, cost, prices, and profit.
Speaking to TechCabal on a call, Deepankar Rustagi, CEO and co-founder of Omnibiz, said that this funding came about because existing investors motivated the company to raise a pre-Series A.
According to a 2020 report by Standard Bank, informal retail controls 90% of Africa’s consumer products and retail market. In Nigeria, companies like Alerzo and TradeDepot also provide digital solutions for informal retailers. According to Rustagi, Omnibiz is different because they digitise the entire retail network. The company does not own a logistics fleet but instead uses its platform to connect a network of logistics companies to existing distributors.
Omnibiz also allows retailers to access credit, buy-now-pay-later options, and other financial services, which was launched in November last year. Rustagi said that they added the buy-now-pay-later feature because retailers on the company’s platform often went out of stock because of a lack of capital to grow their inventory size or volume.
With MyStore, a bookkeeping solution for retailers to manage their customers and inventory, retailers can move forward faster and open multiple stores easily. The company projects that retailers on its platform will see a 4 times increase in their revenue with this added support. He added that building this system has helped the company achieve the retention of 65,000 retailers and an average retailer monthly sales of $250.
Speaking about the challenges that Omnibiz faced with their buy-now-pay-later product, Rustagi said that the company’s biggest challenge was educating the customers on the model.
The company also provides insights that shows retailers their real-time inventory stock so they can avoid purchasing goods that they may struggle to sell. In a statement shared with TechCabal, Omnibiz said that the effectiveness of this insight feature is reflected in the fact that over half of the company’s annual gross merchandise value of $130 million comes from repeat retail customers.
Rustagi also said on the call that these kinds of insights and data are one of the critical areas spurring growth in the retail industry. With the pricing information his company provides retailers with, the retailers are able to make better decisions with their stock-keeping and grow their revenues and margins.
In a statement shared with TechCabal, Nikos Katsaounis, a partner at Timon Capital, said concerning the raise, “We invested in Omnibiz because we believe that it is solving a much-needed problem. The FMCG supply chain is fragmented, inefficient, and opaque. Omnibiz tackles all these problems and addresses them with an efficient software layer that provides much-needed data on this otherwise obscure market and supply chain.”
Source: Muktar Oladunmade | Techcabal.com