Africa’s informal retailers provide most of the continent’s population with a wide range of consumer goods and have annual sales of more than US$1 trillion. However, external inefficiencies and problems with internal challenges have meant that B2B e-commerce startups have proliferated across the region, offering various technology-enabled solutions for accessing products and capital.
One of the players TechCrunch has launched in this space over the past year is Omnibiz, a Lagos-based B2B e-commerce and retail platform that aims to digitize supply chain stakeholders into fast-moving consumer goods (GAs). FMCG) connects manufacturers with retailers. Dipankar Rustagi founded the company in 2019 after years of running the defunct VConnect.
Omnibiz operates an asset-light retail distribution model. When a retailer places an order on the Omnibiz platform, the goods are requested from partner retailers (traditionally known for helping with storage and transportation) who store the goods on behalf of the manufacturers. With Omnibiz, these distributors can focus entirely on warehousing and delegate the responsibility of moving goods to external logistics providers who deliver orders to retailers within 24 hours.
Last August, the startup raised $3 million to expand into new markets within the country. The platform, which offers a mobile app, a WhatsApp channel and a phone number for retailers to stock their stores, has completed its first pan-African move to 12 cities across Nigeria in Ghana. Your footprints have widened.
“We’ve expanded in terms of the number of retailers,” Rustagi told TechCrunch of the company’s growth since the seed raise. “We’ve expanded geographically into cities and improved the overall system; Dealer retention has been phenomenal despite increasing competition. And I think that prepares us for the next race.”
Various performance metrics drive B2B e-commerce platforms across the region – from gross merchandise volume (GMV) and number of retailers to offers and SKUs – as they seek to differentiate themselves. In the case of Omnibiz, it’s about merchant loyalty optimization, a confusing feature in the B2B e-commerce space, but a certain Rustagi seems to have hacked his company.
Retailers are price conscious in the FMCG space. However, having the best prices as a B2B ecommerce platform does not guarantee these retailers will remain loyal. The statement is even more true as FMCG and food prices in Nigeria have fluctuated immensely in recent months. Aside from competitive pricing, platforms like Omnibiz make it easy to work with distributors to help retailers get their products across – be it the fastest SKUs or the slowest. Representative – always in one place when they are needed.
Rustagi said: “If a retailer needs to shop for groceries for weeks or months and one of the products on the platform is cheaper, they may not want to increase their workload of shopping, buying and delivering from multiple locations. “They want, for example, all the big milk brands, [to] be at beck and call. A retailer who remains confident that everything they buy is available can overlook pricing a little here and there. I love how we think about how to build merchant loyalty. ,
According to Rustagi, Omnibiz has strengthened its retailers’ loyalty by supporting them in other areas, including showing an interest in their long-term growth, providing working capital, and managing their businesses and customers.
Behind this strategy is the platform’s accounting solution – the MyStore app, which compares providers like Kippa, Pestel and OZ and allows retailers to manage their customers and inventory and access BNPL services. Rustagi argues that retailers are finding it difficult to manage accounting solutions in Africa as the platforms are often not integrated with their purchases. Therefore, the bookkeeping workload for independent retailers is cumbersome unless they make a profit; As a result, that’s where the MyStore app comes in, he said.
“We integrated end-to-end for retailers. So there is no SKU creation, no pricing or price updates, and no buy and sell price. Everything is trending and allows retailers to efficiently manage inventory and customers. ,
The MyStore app, in addition to the primary OmniBiz retail app, allows the company to pursue a holistic strategy to become the primary B2B operating system for retailers, enabling them to manage last mile delivery, purchases, working capital, Manage inventory management and tracking. resources for. Revenue, cost, price and profit.
Rustagi noted on the conference call that Omnibiz launched the MyStore app last July to target retailers “loyal” to the platform. There are over 3,000 of them. This is relatively small compared to medium to large players in sub-Saharan Africa such as Marketforce, TradeDepot and Vasco, which report several multiples of this number. However, there are some nuances to how Omnibiz measures traction. According to Rustagi, these 3,000 retailers place orders on their platform daily (active day traders), while other players can provide overhead numbers from registered retailers. The Chief Executive provided additional context:
“In this business, you can’t opt for a very high cash burn mechanism and still have a strong path to profitability. We have the right amount of money to grow into a stable, long-term and profitable company,” said Rustagi. “This has led us to focus more on retailers who have the ability and ability to move forward but are unable to do so due to the challenges in their ecosystem. So we’re all in the industry. Retailers choose their retailers instead of collaborating with them. I think that’s how we want to make a difference.”
Omnibiz’ $130 million annual GMV comes from these repeat retail customers. The company expects to increase the number of retailers on its platform to 10,000 next year. It also expects 4X sales growth for these retailers, who join over 200 brands distributed by a network of over 70 logistics partners on Omnibiz’ platform.
Rustagi said the new round of funding will be critical to achieving those goals. Today, the B2B e-commerce company announced it has raised a $15 million pre-Series A round ($5 million equity and $10 million debt) led by Timon Capital has completed. Other VC firms such as Ventures Platform, Lofty Inc., Chapel Hill Denham, Chandaria and Musha Ventures also attended. Some of these investors participated in the company’s seed round.
Omnibiz said it will double use of funds to earn retail customer loyalty and encourage retention. The company also plans to begin its regional expansion this month in the cities it named during its seed growth over the past year: Abidjan, Takoradi, Kumasi and Accra.
Nikos Katsounis, a partner at emerging markets VC Timon Capital, said his firm invested in Omnibiz because he believes the company will solve a much-needed problem. “The FMCG supply chain is fragmented, inefficient and opaque. Omnibiz tackles all of these issues and addresses them with an efficient software layer that provides much-needed data on this obscure market and supply chain. Dipankar Rustagi is a well operating CEO.”