When Deepankar Rustagi final raised cash for OmniRetail in 2022, pleasure was excessive for African startups addressing the availability chain and operational challenges within the fast-moving shopper items (FMCG) sector. At one level, these startups acquired extra capital than all sectors, besides fintech.
Recently, although, the business’s enthusiasm and enterprise capital’s curiosity have pale, as numerous enterprise fashions have struggled beneath mounting strain.
Yet for Rustagi, OmniRetail isn’t simply one other B2B commerce platform; it’s an formidable effort to reshape casual retail throughout Nigeria and West Africa utilizing expertise and embedded finance in a scalable, worthwhile approach. Now, that imaginative and prescient has acquired additional endorsement with a $20 million Series A fairness funding spherical. This capital will assist OmniRetail broaden its presence in Nigeria, Ghana, and Ivory Coast, whereas deepening its give attention to embedded finance merchandise.
The spherical was co-led by Norwegian growth finance establishment Norfund and Lagos-based VC agency Timon Capital, with follow-on participation from Ventures Platform, Aruwa Capital, Goodwell Investments (by way of Alitheia Capital), and Flour Mills of Nigeria.
This marks Norfund’s first direct fairness funding in an African startup, and in keeping with Rustagi, places OmniRetail on a path to dominating in a section the place others have struggled to develop profitably. OmniRetail has raised $38 million in fairness and debt since its inception in 2019.
OmniRetail’s mannequin digitizes order administration for 145 producers, greater than 5,800 distributors and providers over 150,000 casual retailers throughout 12 cities in Nigeria, Ghana and Ivory Coast.
Retailers use the app to order stock, entry working capital, and make digital funds. In the background is a third-party logistics community of over 1,100 autos and distributed warehousing capability managed by 85 native logistics companions.
OmniRetail’s asset-light technique has been essential in hitting profitability. In 2023, the Lagos-based B2B e-commerce platform turned EBITDA optimistic. In 2024, it turned internet worthwhile. An identical story is unfolding in Egypt, the place one other B2B e-commerce platform, Cartona, owes its push towards profitability to the mannequin.
Both CEOs have famous that Africa’s casual market is huge and made up of suppliers and distributors that don’t have to be displaced or competed towards, however moderately made extra environment friendly with the tech instruments offered by their platforms.
“The profitability journey was an end result of our effectivity on using the property that we aggregated within the community, and this has confirmed that the mannequin that we put collectively as a ‘community of networks’ is worthwhile and is very scalable, Rustagi stated. “That’s the rationale we went forward and lift the capital to lastly put the metallic on the pedal and scale in additional geographies and in additional classes. We’re increasing no longer simply to develop, however to optimize.”
Better occupancy in warehousing, smarter logistics routes, and deeper class penetration will all enhance margins, he added.
Rustagi, in a dialog with TechCrunch, alongside OmiRetail’s head of funding, Archit Bagaria, additional defined that the corporate’s progress additionally lies in a deep understanding of the FMCG retail ecosystem, with the complete management workforce boasting a long time of expertise.
According to them, it affords a novel benefit of understanding how the worth chain works, who the important thing gamers are, and the place the gaps in visibility exist.
“For years, items have been transferring from level A to level B, however the lack of transparency has hindered monetary inclusion and precipitated inefficiencies within the course of,” stated Bagaria. “By constructing an ecosystem that streamlines this whole panorama, we are able to remedy these issues.”
Once a startup reaches important mass, Bagaria provides, it turns into simpler to layer further providers, resembling funds and buy-now-pay-later (BNPL), on prime of its current infrastructure. “Our strategy has been completely different from others, and we imagine we’ve discovered success with this mannequin,” Bagaria added.
Unlike different startups that jumped into providing credit score merchandise too early or mistimed the launch, OmniRetail waited till it had vital distribution scale and information. Thanks to this technique, OmniRetail processed over ₦1.3 trillion (~$810 million) in transactions final 12 months, with Omnipay, its BNPL product, disbursing ₦19 billion month-to-month (~$12 million) in stock credit score, boasting near-zero defaults, in keeping with the corporate.
Acquiring Nigeria-based service provider resolution platform Traction Apps in 2024 additional strengthened OmniRetail’s technique. Traction offers full-stack cost capabilities, together with POS terminals, PSSP and Super Agent licenses, and entry to retailer-level gross sales information.
For OmniRetail, the acquisition permits it to realize an entire monetary profile of every retailer, giving it even better management over the availability chain and the power to supply tailor-made monetary options.
“Every transaction within the FMCG worth chain has two sides: the motion of products and the motion of funds,” stated Rustagi. “Today, we’re ready to mixture most advantages from each transaction within the worth chain. Our plan is to dive deep into the worth chain and maximize margins. International gamers have finished properly of their markets, and we’re bringing that mannequin to Nigeria right now.”
While it now not publicly discloses GMV figures, shifting away from the metric that has lengthy been a key efficiency indicator within the sector, it stories a 35% improve in internet merchandise quantity (NMV) and a 40% bump in income over the previous 12 months, all whereas sustaining profitability regardless of its growth.
Some of our subsequent strikes are laser-focused: a strong debt elevate for stock finance, strategic acquisitions, and a relentless worthwhile development.”
With $20 million in contemporary capital, OmniRetail plans to proceed rising its retailer base and broaden into new product classes like private care, dwelling care, and chilly storage.
The capital will even improve its infrastructure, improve its credit score underwriting instruments, and strengthen partnerships with home debt suppliers. As such, a few of its subsequent strikes embody a debt elevate for stock finance and strategic acquisitions, in keeping with Bagaria.
For Norfund, OmniRetail represents greater than only a fintech or commerce guess; it’s infrastructure.
“Embedded finance is without doubt one of the most transformative instruments for small enterprise development in Africa,” stated Norfund Investor Director Cathrine Conradi. “OmniRetail’s mannequin brings capital to areas the place conventional methods haven’t reached.”
Meanwhile, Timon Capital, which backed OmniRetail from its seed stage, sees this as a breakout second for the corporate.
“OmniRetail has now hit an inflection level in distribution, funds, and credit score, displaying simply how a lot worthwhile development they’ll generate with their increasing footprint,” the agency stated.
