The majority of startup investments in Nigeria are centered in Lagos, the country’s main commercial hub. However, investors appear to be increasing trust in Nigeria’s other cities, following the relative success of firms such as Safeboda and Gokada, among others, after they were pursued from Lagos in the now-famous ban on bike-hailing activities. The new investment in Alerzo, a B2B e-commerce retail startup based in Ibadan, Nigeria, has further confirmed reality. Alerzo has announced that it has raised $10.5 million in a Series A round led by Nosara Capital of London. The round also included FJ Labs and various family offices from the United States, Europe, and Asia, including Michael Novogratz’s.
“Growing up in Ibadan, I watched my mother operate two informal retail stores to raise my three siblings and me. Seeing the many challenges she faced running her stores, and I decided to start a business that uniquely catered to the needs of retailers just like her,” said Adewale Opaleye, founder and CEO of Alerzo.
Alerzo has raised more than $20 million in total since its inception. The Baobab Network, a London-based Africa-focused accelerator, and Signal Hill, a Singapore-based fund manager that invested in the company’s $5.5 million seed round last year, are among the early investors. In order to better service its customers, the company has also announced the closing of a $2.5 million working capital facility. According to a recent research by Briter Bridges, only about 1% of African tech startup founder-participants had no degree, a license, or a certificate. Around 40% of those surveyed had a bachelor’s degree, 21% had a master’s degree, and 9% had an MBA. A PhD was held by 3% of the sample.
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Why The Investors Invested
Investors were seemingly attracted by the traction already generated by the startup.
Alerzo claims to have a network of up to 100,000 small enterprises, 90% of which are run by women. Ibadan, Ekiti, and Abeokuta, to name a few, are among the tier-2 to tier-4 cities in Southwest Nigeria that the company serves solely. It connects retailers with consumer brands including as Unilever, Nestlé, Procter & Gamble, Dangote, and PZ, as well as local and multinational distributors.
Also, Approximately one-third of Alerzo’s total retailers use the platform on a monthly basis. Retailers may order products via SMS, phone, or WhatsApp, and have them delivered to their stores in less than 10 hours, according to the company’s website. The startup also claims to have processed over 1 million orders in 2020.
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Aside from being outside of Lagos, the latest investment in Alerzo has a lot of different twists and turns. The founder said he dropped out of college on many occasions, first at a university near Ibadan, where he grew up, and then at a Chinese university, when he left after only two years of studying computer science.
A Look At What The Startup Does
Alerzo was launched in 2018 by Adewale Opaleye as a last-mile distribution network that assists shops in receiving merchandise directly from producers. Its mission, which began in 2019, is to assist street sellers and retailers in Nigeria’s south-western cities in obtaining household products more quickly and efficiently.
According to the founder, Ibadan was the best location for the company’s headquarters because informal shops in the region face more obstacles than those in Lagos.
To process these orders, Alerzo owns and controls its full-stack tech-driven supply chain and logistics. Suppliers can use the company for warehousing and fulfillment, and informal retailers can use it for storefront delivery. To serve its hundreds of customers, it currently possesses approximately 200 cars and 20 warehouses.
Ibadan investors startup Ibadan investors startup
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer