Ibadan-based Alerzo Raises $10.5 Million In Series A Round, Plans To Bring Informal Retailing Online

When Nigerian startups are mentioned in discussions, every person’s thought is driven towards fintech startups like Paystack, Flutterwave, Chaka, Cowrywise, Bamboo, etc. Alerzo is changing that as it is the latest startup making the rounds and it isn’t even a fintech startup.

Founded in 2018 by Adewale Opaleye, Alerzo is a doorstep distribution platform that helps retailers to procure goods directly from manufacturers. The startup started operations in 2019 and has been fulfilling its aim of helping street-side vendors and shops in Nigeria’s south-western cities access household supplies quicker and in an efficient manner. Alerzo is therefore digitalizing the operations of the informal retail sector with its service.

The Ibadan-based B2B e-retail startup announced that it raised $10.5 million in its recently concluded Series A funding round. The round was led by Nosara Capital which is based in the UK. The round brings the total amount the startup has raised since it launched to about $20 million.

In his interview with Techcrunch, the startup’s CEO shared his inspiration for the startup. He said the idea for Alerzo was inspired by the desire to solve the supply challenges his mom faced while she operated her small businesses and the need to empower millions of women who are the pillar of consumer commerce in Africa.

“Growing up in Ibadan, I watched my mother operate two informal retail stores to raise my three siblings and me. Seeing the many challenges she faced running her stores, and I decided to start a business that uniquely catered to the needs of retailers just like her,” he said.

According to him, the biggest problems that these retailers are faced with include an inefficient distribution system which in turn affects their inventory, inability to access financial and banking services, the inconsistency with pricing, etc.

It is quite a surprise that Adewale Opaleye decided to site his business in Ibadan and not Lagos. According to him, Ibadan was the best place to site his startup because apart from the fact that he grew up there Nas knew the city like the back of his palm, informal retailers in the area needed his services and experienced more challenges than their counterparts in Lagos.

Alerzo says it has a network of about 100,000 small businesses, 90 percent of which are owned by women, and is operational in Southwestern Nigeria. Adewale Opaleye said that the startup has been bringing manufacturers closer to retailers and vice versa and has been reducing the need to visit the market as well as mitigate the problems associated with informal retailing.

“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,” the startup’s founder said.

Alerzo says it has processed more than a million orders and that one-third of its retailers use the platform regularly every month.  It also currently owns over 200 vehicles and 20 warehouses to serve its thousands of customers.

Although it is in its nascent stage, investors have a huge belief in the startup and see lots of potentials in it. “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. The company is at the beginning of a compelling multi-decade opportunity to streamline and digitize Nigeria’s retail supply chain”,  Ian Loizeaux, the managing partner at Nosara Capital, said in a statement.

The startup plans to use the funds to fuel its expansion plans into northern Nigeria as well as launch its cashless payments and lending platform which it is calling AlerzoPay.