Fez Supply, a Lagos-based last-mile logistics startup with hubs throughout Nigeria, has raised $1 million led by pan-African investor Ventures Platform with participation from Voltron Capital, Acasia Ventures and different angel traders.
Founder and CEO Seun Alley, in a press release, mentioned the corporate plans to make use of the seed funding to deepen its work in Nigeria (which has a $10 billion transport and logistics market) whereas it considers enlargement — from This autumn 2023 — into different African markets, together with Ghana, Kenya and South Africa. The startup additionally intends to enhance its expertise and operation effectivity, rent extra expertise and enhance its advertising spend.
Alley, who labored for over a decade in Nigeria’s banking sector and later in startups akin to OPay and Bloc, based Fez Supply in 2020. It was a spin-off from a B2B janitorial service and aspect hustle she opened two years prior. Whereas operating the enterprise, Alley obtained a number of complaints from her clients relating to the janitors: Though they did thorough cleansing within the mornings, they have been primarily absent to hold out the required touch-ups all through the remainder of the day. “We realized that this occurred as a result of the janitors went on a lot of errands for our shoppers’ staff,” the chief govt instructed TechCrunch over a name. “And the explanation for this, we realized, was as a result of a lot of the locations they have been shopping for stuff from didn’t have a dispatch or logistics service.”
The state of affairs is peculiar to many companies throughout Nigeria, as evident in a easy market analysis Alley undertook earlier than launching Fez Supply. Alley mentioned she spoke with entrepreneurs and small enterprise house owners, together with these exterior and inside her circle, to ask about their main points: expertise and logistics topped the record.
Whereas logistics is one in every of Nigeria’s fastest-growing industries, it is usually one in every of its most fragmented. The sector remains to be fairly nascent in lots of components of Africa and has barely scratched the floor despite the fact that the hundreds of thousands poured into startups — working in varied aspects from haulage to final mile — are but to construct sustainable companies. In the meantime, within the last-mile class, pricing, attain and supply instances are frequent complications that startups and small companies encounter; these options are what Fez Supply’s options optimize for, based on Alley. Particular person clients can entry its companies by way of cell and internet apps to position and monitor orders, handle spend, collate information on particular enterprise factors and make funds. Alternatively, the startup gives APIs and dashboards to its enterprise shoppers. Fez Supply claims to have over 17,000 clients utilizing its platform (70% are people, whereas 30% are a mix of SMEs and startups).
Final 12 months, the two-year-old startup launched a vertical: FEZ for fintechs, the place it helped fintechs ship debit playing cards and POS terminals to all their clients and brokers throughout Nigeria. To fulfill up with the demand, Fez Supply lately developed a SaaS platform to onboard and confirm skilled third-party two-wheeler logistics platforms, with fleet sizes of about five-10, to assist full orders that it might’t fulfill. These third-party companions share within the income Fez Supply makes by charging people per supply (based mostly on the gap lined and measurement of things) and companies a month-to-month flat-fee subscription (based mostly on a set vary of deliveries).
Fez Supply mentioned it accomplished 200,000 journeys final 12 months and grew income by 20% month-on-month. Its clientele base contains the likes of Flutterwave, Kuda Financial institution, Moniepoint, OPay, Crimson Bull and Famasi Africa, per its assertion.
The Techstars Toronto-backed platform faces competitors in Nigeria, together with Uber, by way of its Uber Join product, Kwik Supply and Gokada, amongst different upstarts. Alley argues that Fez Supply’s differentiator is in its mannequin; whereas others function on-demand, her startup is a hybrid of on-demand and the hub and spoke mannequin. “We decide objects from clients in bulk and take them to a central location the place they’re zoned earlier than assigning them to riders to finish,” the CEO commented. “So I wish to seek advice from Fez as operating a hybrid mannequin. Now we have the expertise and nonetheless personal 30% of the property on our platform. What that does is that if third-party companions don’t present up for any motive, we now have backup and may full our deliveries by ourselves. So for us, we predict that provides us an edge as a result of we additionally personal a major variety of property whereas additionally offering expertise.”
Talking on why Ventures Platform invested, Dotun Olowoporoku, basic companion at Ventures Platform, in a press release, mentioned his agency determined to again Fez Supply as a result of its expertise, which permits different market gamers to thrive, is well-aligned with the agency’s funding thesis to assist market-creating innovation in underserved industries akin to logistics.
“I’ve realized we will construct and create options round cost and core fintech. However there are different issues inside the ecosystem that nobody is , one in every of which is logistics,” famous Alley, who additionally had a short stint at mobility fintech Moove, when requested why she was constructing within the logistics and supply area as a substitute of fintech, the place she has a number of years of expertise.
