Omniretail Secures $20M Series A to Disrupt African B2B E-commerce

OmniRetail Secures $20 Million Series A Funding to Revolutionize West African Retail

Deepankar Rustagi’s OmniRetail recently completed a $20 million Series A equity funding round, signaling renewed confidence in African startups focused on improving supply chains within the fast-moving consumer goods (FMCG) sector.

A Shift in Investor Sentiment

While investment in these startups previously surpassed most other sectors, recent challenges have led to a decrease in both enthusiasm and venture capital interest. Many business models have faced increasing difficulties.

OmniRetail’s Distinct Approach

Rustagi views OmniRetail as more than a standard B2B commerce platform. It represents a comprehensive effort to modernize informal retail throughout Nigeria and West Africa through the integration of technology and embedded finance, aiming for both scalability and profitability.

Funding Details and Expansion Plans

The funding round was jointly led by Norfund, a Norwegian development finance institution, and Timon Capital, a VC firm based in Lagos, Nigeria. Existing investors, including Ventures Platform, Aruwa Capital, Goodwell Investments (through Alitheia Capital), and Flour Mills of Nigeria, also participated.

This new capital will facilitate OmniRetail’s expansion into Nigeria, Ghana, and Ivory Coast. A key focus will be the further development of its embedded finance offerings.

Norfund’s First Direct Equity Investment

This investment marks Norfund’s inaugural direct equity investment in an African startup. Rustagi believes it positions OmniRetail for leadership in a market segment where profitability has proven elusive for others. To date, OmniRetail has secured $38 million in combined equity and debt since its founding in 2019.

Digitizing the Retail Ecosystem

OmniRetail’s platform digitizes order management for a network of 145 manufacturers and over 5,800 distributors. It currently serves more than 150,000 informal retailers across 12 cities in Nigeria, Ghana, and Ivory Coast.

Retailers utilize the app to manage inventory orders, gain access to working capital, and process digital payments. A network of over 1,100 vehicles and 85 local logistics partners supports the platform with third-party logistics and distributed warehousing.

Achieving Profitability Through an Asset-Light Model

OmniRetail’s asset-light strategy has been instrumental in achieving profitability. The B2B e-commerce platform reached EBITDA positivity in 2023 and net profitability in 2024. This success mirrors a similar trend observed with Cartona in Egypt, another B2B e-commerce platform.

Both companies’ CEOs emphasize the importance of enhancing, rather than disrupting, Africa’s vast informal market. Their platforms provide technological tools to improve the efficiency of existing suppliers and distributors.

Scaling for Optimization

“Our profitability resulted from efficiently utilizing the assets within our network,” explained Rustagi. “This demonstrates the viability and scalability of our ‘network of networks’ model.” He added that the new funding will accelerate expansion into new geographies and product categories, focusing on both growth and optimization.

Improvements in warehousing occupancy, logistics routing, and category penetration are expected to further enhance margins.

Deep Understanding of the FMCG Landscape

Rustagi, along with OmniRetail’s head of investment, Archit Bagaria, highlighted the company’s deep understanding of the FMCG retail ecosystem. The leadership team collectively possesses decades of experience in the industry.

This expertise provides a unique advantage in understanding the value chain, identifying key players, and pinpointing areas where visibility is lacking.

Streamlining the Value Chain

“For years, goods have moved between points, but a lack of transparency has hindered financial inclusion and created inefficiencies,” stated Bagaria. “By creating an ecosystem that streamlines the entire process, we can address these challenges.”

Layering Additional Services

Bagaria noted that once a startup achieves sufficient scale, it becomes easier to integrate additional services, such as payments and buy now, pay later (BNPL), into its existing infrastructure. “Our approach differs from others, and we believe it has been key to our success,” he said.

Strategic Timing of Financial Products

Unlike some competitors who launched credit products prematurely, OmniRetail waited until it had established significant distribution scale and accumulated substantial data. This strategy has enabled OmniRetail to process over ₦1.3 trillion (~$810 million) in transactions annually.

Its BNPL product, Omnipay, disburses ₦19 billion (~$12 million) monthly in inventory credit, with remarkably low default rates.

Acquisition of Traction Apps

The 2024 acquisition of Traction Apps, a Nigeria-based merchant solution platform, further strengthened OmniRetail’s position. Traction provides comprehensive payment capabilities, including POS terminals, PSSP, and Super Agent licenses, as well as access to retailer-level sales data.

This acquisition provides OmniRetail with a complete financial profile of each retailer, enhancing control over the supply chain and enabling the delivery of customized financial solutions.

Aggregating Benefits Across the Value Chain

“Every transaction in the FMCG value chain involves both the movement of goods and the movement of funds,” said Rustagi. “We are now positioned to maximize benefits from every transaction. Our plan is to delve deeper into the value chain and optimize margins. We are bringing a proven model to the Nigerian market.”

Focus on Net Merchandise Volume and Revenue

OmniRetail has shifted away from publicly reporting Gross Merchandise Volume (GMV), a common metric in the sector, and now focuses on Net Merchandise Volume (NMV) and revenue. The company reports a 35% increase in NMV and a 40% increase in revenue over the past year, while maintaining profitability during its expansion.

Future Plans and Strategic Priorities

“Our next steps are sharply focused: securing debt financing for inventory, pursuing strategic acquisitions, and driving profitable growth,” Rustagi stated.

With the new funding, OmniRetail intends to expand its retailer base and diversify into new product categories, including personal care, home care, and cold storage. The capital will also be used to upgrade infrastructure, refine credit underwriting tools, and strengthen partnerships with domestic debt providers.

Norfund’s Perspective: Investing in Infrastructure

For Norfund, OmniRetail represents more than just a fintech or commerce investment; it’s an investment in essential infrastructure. “Embedded finance is a transformative tool for small business growth in Africa,” said Norfund investor director Cathrine Conradi. “OmniRetail’s model extends capital to areas underserved by traditional systems.”

Timon Capital’s Vision

Timon Capital, an early investor in OmniRetail, views this funding round as a pivotal moment for the company. “OmniRetail has reached an inflection point in distribution, payments, and credit, demonstrating its capacity for profitable growth with its expanding footprint,” the firm commented.