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 buyers.
Founder and CEO Seun Alley, in a press release, stated 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 growth — from This autumn 2023 — into different African markets, together with Ghana, Kenya and South Africa. The startup additionally intends to enhance its know-how and operation effectivity, rent extra expertise and improve its advertising and marketing spend.
Alley, who labored for over a decade in Nigeria’s banking sector and later in startups similar to OPay and Bloc, based Fez Supply in 2020. It was a spin-off from a B2B janitorial service and facet 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 had been primarily absent to hold out the mandatory 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 purchasers’ staff,” the chief govt informed TechCrunch over a name. “And the explanation for this, we discovered, was as a result of many of the locations they had 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 stated she spoke with entrepreneurs and small enterprise house owners, together with these outdoors and inside her circle, to ask about their main points: expertise and logistics topped the listing.
Whereas logistics is one in all Nigeria’s fastest-growing industries, additionally it is one in all its most fragmented. The sector remains to be fairly nascent in lots of elements of Africa and has barely scratched the floor although the tens of millions poured into startups — working in numerous sides from haulage to final mile — are but to construct sustainable companies. In the meantime, within the last-mile class, pricing, attain and supply occasions are widespread complications that startups and small companies encounter; these options are what Fez Supply’s options optimize for, in accordance with Alley. Particular person clients can entry its companies by way of cellular and internet apps to put and monitor orders, handle spend, collate knowledge on particular enterprise factors and make funds. Then again, the startup affords APIs and dashboards to its enterprise purchasers. 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 satisfy up with the demand, Fez Supply lately developed a SaaS platform to onboard and confirm educated third-party two-wheeler logistics platforms, with fleet sizes of about five-10, to assist full orders that it may’t fulfill. These third-party companions share within the income Fez Supply makes by charging people per supply (based mostly on the space lined and dimension of things) and companies a month-to-month flat-fee subscription (based mostly on a set vary of deliveries).
Fez Supply stated 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 prefer to check with Fez as operating a hybrid mannequin. We have now the know-how and nonetheless personal 30% of the belongings on our platform. What that does is that if third-party companions don’t present up for any cause, we’ve backup and might full our deliveries by ourselves. So for us, we expect that offers us an edge as a result of we additionally personal a big variety of belongings whereas additionally offering know-how.”
Talking on why Ventures Platform invested, Dotun Olowoporoku, common associate at Ventures Platform, in a press release, stated his agency determined to again Fez Supply as a result of its know-how, which allows different market gamers to thrive, is well-aligned with the agency’s funding thesis to help market-creating innovation in underserved industries similar to logistics.
“I’ve realized we will construct and create options round fee and core fintech. However there are different issues inside the ecosystem that nobody is taking a look at, one in all which is logistics,” famous Alley, who additionally had a quick stint at mobility fintech Moove, when requested why she was constructing within the logistics and supply area as an alternative of fintech, the place she has a number of years of expertise.