Revolutionizing Informal Retail in Africa: OmniRetail Secures $20 Million in Series A Funding
When Deepankar Rustagi last secured funding for OmniRetail in 2022, the excitement was palpable for African startups tackling supply chain and operational challenges in the fast-moving consumer goods (FMCG) sector. At one point, these startups were receiving substantial capital, second only to fintech in terms of investment.
However, the landscape has shifted since then, with the industry’s enthusiasm waning and venture capital interest dwindling as various business models faced mounting pressure.
For Rustagi, OmniRetail is more than just a B2B commerce platform; it represents a bold initiative to transform informal retail in Nigeria and West Africa through technology and embedded finance in a scalable and profitable manner. This vision has now received a significant boost with a $20 million Series A equity funding round. This capital infusion will support OmniRetail in expanding its presence in Nigeria, Ghana, and Ivory Coast while deepening its focus on embedded finance products.
The Series A round was co-led by Norwegian development finance institution Norfund and Lagos-based VC firm Timon Capital, with continued support from Ventures Platform, Aruwa Capital, Goodwell Investments (via Alitheia Capital), and Flour Mills of Nigeria.
This investment marks Norfund’s first direct equity investment in an African startup and positions OmniRetail to dominate in a segment where others have struggled to achieve profitable growth. Since its inception in 2019, OmniRetail has raised a total of $38 million in equity and debt funding.
OmniRetail’s model digitizes order management for 145 manufacturers, over 5,800 distributors, and serves more than 150,000 informal retailers across 12 cities in Nigeria, Ghana, and Ivory Coast.
Through the app, retailers can place orders, access working capital, and make digital payments. Behind the scenes, there is a third-party logistics network comprising over 1,100 vehicles and distributed warehousing capacity managed by 85 local logistics partners.
Profitability Through Innovation
OmniRetail’s asset-light strategy has been instrumental in achieving profitability. In 2023, the platform became EBITDA positive, followed by reaching a net profit in 2024. A similar trajectory is evident in Egypt, where another B2B e-commerce platform, Cartona, has embraced a similar model to drive towards profitability.
Both CEOs emphasize that Africa’s informal market is extensive and consists of suppliers and distributors who can benefit from enhanced efficiency rather than displacement or competition. The key to their success lies in leveraging technology to streamline operations and enhance financial inclusion.
According to Rustagi, the profitability journey is a result of maximizing the aggregated assets within the network, demonstrating the scalability and profitability of their ‘network of networks’ model. With the latest funding, OmniRetail aims to expand into new geographies and product categories, optimizing operations for sustained growth.
By understanding the intricacies of the FMCG retail ecosystem, OmniRetail’s leadership team, boasting decades of experience, is well-equipped to identify opportunities for enhancing efficiency and driving growth.
Empowering Financial Inclusion
OmniRetail’s success lies in its ability to provide transparency and efficiency in the movement of goods and funds within the value chain. By building an ecosystem that addresses these challenges, the platform aims to drive financial inclusion and operational efficiency.
Unlike other startups that prematurely introduced credit products, OmniRetail waited until it achieved significant distribution scale and data insights. This approach has enabled the platform to process over ₦1.3 trillion (~$810 million) in transactions, with its BNPL product, Omnipay, disbursing ₦19 billion monthly (~$12 million) in inventory credit with minimal defaults.
The recent acquisition of Nigeria-based merchant solution platform Traction Apps further strengthens OmniRetail’s position in the market. Traction’s payment capabilities, including POS terminals and access to sales data, provide OmniRetail with a comprehensive financial profile of each retailer, enabling tailored financial solutions and greater supply chain control.
Future Growth and Expansion
With the infusion of $20 million in fresh capital, OmniRetail is poised to expand its retailer base, diversify into new product categories, and enhance its infrastructure and credit underwriting tools. The platform’s strategic focus includes securing debt financing for inventory management and pursuing strategic acquisitions to fuel profitable growth.
Norfund views OmniRetail as a transformative force in driving small business growth in Africa through embedded finance, while Timon Capital recognizes the company’s potential for substantial growth in distribution, payments, and credit.
As OmniRetail continues to innovate and expand, its commitment to optimizing the value chain and maximizing margins sets the stage for sustainable growth and impact in the African retail landscape.
