NIGERIA – Omnibiz, an e-commerce startup based in Nigeria, has raised US$3 million in a seed round to expand into other markets. V&R Africa, Timon Capital, and Tangerine Insurance led the seed round.
Lofty Inc., Musha Ventures, Sunu Capital, Launch Africa, and Rising Tide Africa were also part of the round.
Omnibiz will utilize the funds to expand in additional West African cities outside of Nigeria, including Abidjan, Takoradi, Kumasi, and Accra, over the next few months.
The main categories on its platform include food, non-alcoholic beverages, personal care, and infant care items.
The company intends to grow into other areas such as alcoholic beverages and over-the-counter pharmaceuticals.
“I think Omnibiz will be the role model for B2B retail in Africa and can scale well into other emerging markets.”
Raj Kulasingam and Vishal Agarwal of V&R Africa
Omnibiz will also use the funds to develop new technology products that will benefit retailers. The company will collaborate with partners to boost the availability of working cash for merchants and provide digital solutions to help them run their businesses more efficiently.
“One of the key things we intend to do is to bring on medium-scale manufacturers who find it difficult to get the last-mile delivery to reach customers.
“We want to scale them so they can reach a large number of retailers. That’s something we are rolling out so we can onboard more and more manufacturers,” said CEO Deepankar Rustagi.
Apart from coming from a strong entrepreneurial background, Rustagi had consulted for a long time in the Fast Moving Consumer Goods (FMCG) market. In 2011, he founded VConnect, an online marketplace and search engine to identify local professionals for service needs.
Before closing down in 2017, Rustagi said the website connected people with over 100 services and 500,000 companies around the country.
“I think Omnibiz will be the role model for B2B retail in Africa and can scale well into other emerging markets. We are excited and happy to be supporting Omnibiz in all ways beyond just providing capital,” Raj Kulasingam and Vishal Agarwal of V&R Africa said in a statement.
Investors also seemed convinced of Rustagi’s proposition that he would leverage resources and lessons from his failed startup to grow his new venture.
“We knew about small businesses and what sort of technology they like. That was our specialization, but our business model didn’t work. But in this case [Omnibiz], the monetization happens on our platform, and there’s money to be made for the small business. We’ve been growing 30% month-on-month for the last 12 months,” he said.
One special feature of the service is that retailers can use the platform’s mobile app, WhatsApp channel, and phone number to fill their stores.
“Retailers can “make orders at their leisure and have things delivered to their doorstep at no cost,” indicated Omnibiz.
The start-up uses a retail distribution model that is asset-light. When a retailer places an order on the Omnibiz platform, it is sent to partner distributors, who keep items on behalf of manufacturers and are known for their warehouse and transportation services.
These distributors can concentrate entirely on warehousing, leaving the transportation of goods to Omnibiz’s third-party logistics suppliers.
Omnibiz uses drivers of various logistics companies to efficiently distribute orders to retailers within 24 hours.
Lagos, Abuja, Port Harcourt, and Kaduna are the four cities where the B2B e-commerce retail company is now operating. Rustagi adds that the company will add two additional cities, Ibadan and Kano, by the end of August.
