Techstars-backed Fez Delivery secures funding to scale its last-mile logistics platform
Fez Delivery, a Lagos-based last mile logistics startup with hubs across Nigeria, has raised $1m led by pan-African investor Ventures Platform with participation from Voltron Capital, Acasia Ventures and other angel investors .
Founder and CEO Seun Alley, in a statement, said the company plans to use the seed investment to deepen its work in Nigeria (which has a $10 billion transport and logistics market) while looking to expand – starting in the fourth quarter of 2023 – into other African markets, including Ghana, Kenya and South Africa. The startup also intends to improve its technology and operational efficiency, hire more talent, and increase its marketing spend.
Alley, who worked for over a decade in the Nigerian banking industry and later in startups such as OPay and Bloc, founded Fez Delivery in 2020. It was a spin-off from a B2B concierge and a parallel hustle it had opened two years prior. While running the business, Alley received several complaints from clients about the janitors: Although they did a deep clean in the morning, they were mostly away doing necessary touch-ups throughout the day. “We realized this happened because concierges were running a lot of errands for our clients’ employees,” the general manager told TechCrunch on a call. “And the reason for that, we learned, is that most of the places they were buying things from didn’t have shipping or logistics.”
The situation is unique to many businesses across Nigeria, as evidenced by a simple market research Alley undertook before launching Fez Delivery. Alley said she’s spoken to entrepreneurs and small business owners, including those outside and around her, to ask about their top issues: talent and logistics at the top of list.
While ILogistics is one of Nigeria’s fastest growing industries, it is also one of the most fragmented. The sector is still quite nascent in many parts of Africa and has barely scratched the surface, even though the millions poured into startups – operating in various facets from transport to the last mile – have yet to create sustainable businesses. . Meanwhile, in the last mile categorypprice, scope, and delivery times are common headaches faced by startups and small businesses; these features are what Fez Delivery’s solutions optimize, according to Alley. Individual customers can access its services through mobile and web applications to place and track orders, manage expenses, gather data on specific business points, and make payments. On the other hand, the startup offers APIs and dashboards to its business customers. Fez Delivery claims to have over 17,000 customers using its platform (70% are individuals, while 30% are a combination of SMEs and startups).
Last year, the two-year-old startup launched a vertical: FEZ for fintechs, where it helped fintechs provide debit cards and point-of-sale terminals to all their customers and agents across Nigeria. To meet demand, Fez Delivery has recently developed a SaaS platform to integrate and verify trained third-party two-wheeled logistics platforms, with fleet sizes of approximately 5-10, to help fulfill orders that we require. ‘she can’t honor. These third-party partners share the revenue that Fez Delivery makes by charging individuals per delivery (based on distance traveled and size of items) and businesses a flat monthly fee (based on a set range of deliveries).
Fez Delivery said it made 200,000 trips last year and increased its revenue by 20% month-on-month. Its customer base includes Flutterwave, Kuda Bank, Moniepoint, OPay, Red Bull and Famasi Africa, among others, according to its statement.
The Techstars Toronto-backed platform faces competition in Nigeria including Uber through its Uber Connect product, Kwik Delivery and Gokada, among other upstarts. Alley argues that Fez Delivery’s differentiator is its model; while others operate on demand, his startup is a hybrid of demand and the hub and spoke model. “We select customer items in bulk and take them to a central location where they are zoned before assigning them to riders for completion,” commented the CEO. “So I like to say that Fez uses a hybrid model. We have the technology and still own 30% of our platform assets. That means if third-party partners don’t show up for whatever reason, we have a backup and can doing our deliveries on our own. So for us, we think that gives us an advantage because we also own a significant number of assets while also providing technology.”
Speaking on why Ventures Platform invested, Dotun Olowoporoku, general partner of Ventures Platform, said in a statement that his company decided to support Fez Delivery because its technology, which enables other market players to thrive, is well aligned with the company’s investment thesis. support market-creating innovation in underserved sectors such as logistics.
“I realized we could build and create solutions around payment and core fintech. But there are other issues within the ecosystem that no one is looking at, including logistics,” Alley noted. , who also had a brief stint at mobility fintech Moove, when asked why she was building in the logistics and delivery space instead of fintech, where she has several years of experience.
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