Alerzo, a B2B e-commerce retail startup based in Ibadan, Nigeria has a $10.5 million Series A round led by London-based Nosara Capital. FJ Labs and several family offices from the U.S., Europe, and Asia, including Michael Novogratz’s, participated in the round.
In total, Alerzo has raised more than $20 million since its launch. Early investors include the Baobab Network, an Africa-focused accelerator based in London, and Signal Hill, a Singapore-based fund manager that participated in its $5.5 million seed round last year. The company also said it closed a $2.5 million working capital facility to serve its customers.
The funding round will be used to expand geographically to northern Nigeria. Alerzo also plans to launch AlerzoPay, the company’s cashless payments, and lending platform, as well as a portfolio of new business support services.
Founded in 2018 by Adewale Opaleye, Alerzo , is centered on helping street-side vendors and shops in Nigeria’s south-western cities access household supplies quicker and efficiently.
Alerzo claims to have built up a network of up to 100,000 small businesses, 90% of which are women-led. The company exclusively serves the country’s tier-2 to tier-4 cities in Southwest Nigeria — Ibadan, Ekiti, and Abeokuta, to name a few. It connects retailers to local and multinational distributors of consumer brands, like Unilever, Nestlé, Procter & Gamble, Dangote, and PZ.
“Without Alerzo, these retailers need to take a day off from the store to visit a central market, pay for transportation and haul a large amount of inventory back to the store. Alerzo replaces this stressful experience by not only reducing costs and time spent running a retail shop but also improving the livelihood of these working women,” said the founder about the company’s growth.
Alerzo owns and operates its full-stack tech-driven supply chain and logistics to process these orders. The company provides warehousing and fulfillment solutions to suppliers and storefront delivery to informal retailers. It currently owns over 200 vehicles and 20 warehouses to serve its thousands of customers.
“We’ve studied informal retail marketplaces globally over the last couple of years and Alerzo really stood out to us due to a strong management team led by a founder with a unique understanding of his customer and an attractive business model with exceptional unit economics,” said Ian Loizeaux, the managing partner at Nosara Capital, in a statement. “The company is at the beginning of a compelling multi-decade opportunity to streamline and digitize Nigeria’s retail supply chain.”
Seed investor Kevin Jung of Signal Hill cites Alerzo’s focus on the informal retail market outside Lagos as one of the reasons why he backed Alerzo earlier on. He also referred to the company’s orientation toward Asia (a playbook Opaleye adopted when he went to China for studies in 2016), as the best reference point for the emerging business model of digitizing informal retail markets.
Alerzo has an office in Singapore that the CEO says serves as a regional hub to identify best practices among similar high-growth businesses operating across Southeast Asia and India and adapt them to the Nigerian market. Likewise, to expand its digital footprint, the company recently launched an office in Lagos.
