Omnibiz gets $3M to digitize Nigeria's informal B2B supply chain ' TechCrunch

Despite the rise of VC-backed ecommerce companies like Jumia and the establishment of shopping malls, informal retail is still king in Africa.PwC's 2016 study found that 90% of all sales in Africa's major economies are made through informal channels such as kiosks and markets.This is a huge market that is ripe to digitization. Over the past five year, African startups have taken on the challenge and raised millions of dollars. Omnibiz, a startup based in Lagos, has today raised $3 million for its seed round to expand into new markets.Omnibiz is an e-commerce platform for B2B that connects manufacturers and retailers of fast-moving consumer goods (FMCGs). It digitizes the supply chain to facilitate this.The platform provides a mobile app, WhatsApp channel, and a number for retailers to stock their stores. Omnibiz claims that retailers can place orders from their home and have their goods delivered at no additional cost.Deepankar Rustagi launched Omnibiz in 2019. Deepankar Rustagi, an Indian founder and CEO, has been living in Nigeria for more than two decades. He founded VConnect in 2011, which was an online marketplace and search engine that allows local professionals to be found for their service needs.Rustagi claims that the platform linked individuals to more than 100 services, and over 500,000 businesses throughout the country.Rustagi was consulted by multiple FMCG brands after VConnect. Rustagi realized that there was a need for retailers and manufacturers of goods to digitize their processes, which led to the launch Omnibiz in late 2019Omnibiz uses an asset-light distribution model for retail. Omnibiz allows retailers to place orders on its platform. They can request partner distributors, who store goods for manufacturers and have a tradition of helping with transportation and warehousing.These distributors can concentrate on warehousing, and then transfer the responsibility for transporting goods to Omnibiz' third-party logistics providers. Omnibiz allows these logistic providers to quickly distribute orders to retailers within 24 hours.We partner with manufacturers to increase visibility. Next, buy their goods and store them in partner hubs which act as warehouses or distributors. Rustagi explained to TechCrunch that drivers who work with third-party logistics drivers get paid for every delivery.This value chain can be digitalized to help retailers save capital, while Omnibiz connects them to more than 20 brands including Unilever and Procter & Gamble, Nestl, Nestl, Kelloggs and Kimberly-Clark.The B2B ecommerce retail company is currently located in four cities in Nigeria, Abuja and Port Harcourt. Rustagi says that the company will soon add Kano and Ibadan to its list of cities.Omnibiz, Rustagis' account, will draw on his previous business, VConnect, which he struggled to scale and monetize despite its popularity as a local marketplace.We were familiar with small businesses and the technology they used. This was our specialty, but it didn't work in our business model. In this case, however [Omnibiz], monetization takes place on our platform and small businesses can make money. He said that we have seen a 30% increase in monthly traffic over the past 12 months.In the past few years, B2B informal electronic commerce has experienced a revival. Sokowatch Kenya, Twiga and TradeDepot Nigeria and Egypts MaxAB all fought for market-leadership positions in their respective markets.As all of the mentioned startups raised money in the past year, it sparked more interest in their activities. This includes newcomers Omnibiz and Kenyas MarketForce.While some operate asset-light models while others manage the entire digitization process, others are more involved. Rustagi believes that the former is better for the company as it allows distributors to expand their reach, rather than eliminating them.Scaling in one city with assets is possible, I believe. Rustagi said that scaling in one city with assets is not difficult. However, if you need to scale in twenty or more cities in a country such as Nigeria, Ghana, Ivory Coast, East Africa or Ivory Coast, it will require a lot of investment. We believe that without substantial investment in assets we can scale much more quickly. We have full control of the business because we adopted the tech-first approach. We are in the right place at the right time, with the right model.V&R Africa and Timon Capital led Omnibiz' seed round. Tangerine Insurance was also involved. Lofty Inc. and Musha Ventures were also part of the round, as was Sunu Capital, Launch Africa and Rising Tide Africa. The company now has a total investment of $4 million. Rustagi also revealed that Seedstars also funded the company and that they will be participating in the accelerators' growth program.Omnibiz is a role model in B2B retail in Africa, and I believe it can expand into other emerging markets. V&R Africa's Raj Kulasingam, Vishal Agarwal and Vishal Agarwal stated in a statement that they are happy to support Omnibiz in more ways than just capital.Omnibiz plans to use the investment in the coming months to expand into other West African cities, including Accra, Takoradi and Kumasi. The top categories of the Omnibiz platform are food, non-alcoholic drinks, personal care and baby products. The company plans to expand into new categories such as OTC pharmaceutical products and alcoholic beverages.Omnibiz will also make use of the investment to develop new products for retailers. Omnibiz will partner with other companies to increase working capital for retailers and to provide digital tools that help them manage their businesses more efficiently.We plan to recruit medium-sized manufacturers that have difficulty getting the last-mile delivery to customers. We plan to scale them up so that they can reach large numbers of retailers. This is something that we are working on so that we can add more manufacturers to Omnibizs future plans.