OmniRetail Secures $20 Million to Innovate West Africa’s Retail Landscape
In a significant boost for the B2B commerce ecosystem, OmniRetail, under the leadership of Deepankar Rustagi, has successfully completed a $20 million Series A funding round. This milestone comes at a time when many African startups are reevaluating their business strategies amid challenges in the fast-moving consumer goods (FMCG) sector.
Funding Details and Investor Insights
The funding round was co-led by Norfund, the Norwegian development finance institution, and Timon Capital, a Lagos-based venture capital firm. Also participating in the round were Ventures Platform, Aruwa Capital, Goodwell Investments (through Alitheia Capital), and Flour Mills of Nigeria. Notably, this investment marks Norfund’s inaugural direct equity stake in an African startup.
Strategic Growth Plans
OmniRetail, founded in 2019, aims to revolutionize informal retail across Nigeria and West Africa using technology and embedded finance. With this new capital, the company plans to broaden its footprint in Nigeria, Ghana, and Ivory Coast, while enhancing its focus on embedded finance products.
A Unique Business Model
The platform already supports over 145 manufacturers and more than 5,800 distributors, serving upwards of 150,000 informal retailers across 12 urban centers. OmniRetail’s app enables retailers to manage inventory orders, access working capital, and conduct digital payments. This framework is underpinned by a third-party logistics network that includes over 1,100 vehicles and partnerships with 85 local logistics providers.
Achieving Profitability
OmniRetail’s asset-light business model has been crucial to its financial success. In 2023, the company achieved EBITDA positivity and subsequently shifted to net profitability in 2024. This trajectory mirrors developments in the broader African B2B e-commerce landscape, with other platforms like Cartona following similar paths towards profitability.
Understanding the Retail Ecosystem
Rustagi emphasizes the leadership team’s extensive expertise in the FMCG sector, which grants OmniRetail a distinctive advantage. “The profitability journey was an outcome of our efficiency on utilizing the assets that we aggregated in the network,” he stated. “Our model as a ‘network of networks’ is both profitable and scalable.”
Archit Bagaria, OmniRetail’s head of investment, noted the importance of transparency in the FMCG value chain, indicating that improving visibility can drive financial inclusion and eliminate inefficiencies.
Innovative Financial Solutions
OmniRetail’s approach differs from competitors by strategically layering services like payments and buy-now-pay-later (BNPL) offerings only once they achieved significant distribution scale. In the previous year, the platform processed transactions totaling over ₦1.3 trillion (approximately $810 million), with its BNPL service, Omnipay, providing ₦19 billion (~$12 million) in monthly inventory credit.
Future Directions
To bolster its strategy, OmniRetail announced the acquisition of Traction Apps, a Nigerian merchant solution platform, in 2024. This move enhances the company’s payment capabilities and provides comprehensive sales data, allowing for tailored financial solutions for retailers.
Rustagi remarked, “Today, we are in a position to aggregate maximum benefits from every transaction in the value chain.” The company has witnessed a 35% increase in net merchandise volume and a 40% revenue surge over the past year, while still maintaining profitability amidst expansion efforts.
Capital Utilization and Growth Focus
With the influx of $20 million, OmniRetail is set to escalate its growth trajectory by expanding its retailer base and venturing into new product categories, including personal care and home care. Investments will also be directed toward upgrading infrastructure and refining credit underwriting tools.
Cathrine Conradi, Investor Director at Norfund, remarked, “Embedded finance is one of the most transformative tools for small business growth in Africa,” highlighting the far-reaching impact of OmniRetail’s model.
Conclusion
The backing from Timon Capital and other investors marks a pivotal point for OmniRetail, as it embarks on amplifying its distribution, payments, and credit capabilities. The company’s ongoing commitment to profitable growth amidst the evolving landscape highlights its potential as a key player in the African retail sector.
