Omnibiz receives $3M from the Nigerian government to digitize informal B2B supply Chain

Despite the rise of VC-backed ecommerce businesses like Jumia and shopping centers, informal retail is still king in Africa.

PwC’s 2016 survey found that 95% of all sales in Africa’s main economies are made through informal channels, such as markets or kiosks. __S.2__

These are large markets that can be digitalized. Over the last five years, African startup have taken up the challenge and raised millions of dollars. __S.4__

Omnibiz, a B2B online e-commerce platform connects manufacturers and retailers of fast-moving consumer products (FMCGs). It digitizes the supply chain to make it easier for them to sell their goods.

It offers retailers a WhatsApp channel, a mobile application and a number to use for stocking their stores. __S.7__

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 both an online platform and search engine that helped local service providers find him. __S.10__

This platform linked individuals to more than 100 services, and over 500,000 businesses in the country. It was shut down by Rustagi in 2017.

Rustagi was consulted by multiple FMCG companies after VConnect. __S.13__

Omnibiz uses an asset-light distribution model for retail. Omnibiz allows retailers to place orders on its platform. They can request partner distributors, who are warehouse owners for manufacturers. These partners have a long history of helping with transportation and warehousing. __S.16__

Omnibiz allows distributors to focus on warehouse management and leave the logistics of shipping goods to Omnibiz’s third party logistic providers. __S.18__

We work closely with manufacturers in order to increase visibility. They then buy their goods and store them at partner hubs, which act as warehouses or distributors. __S.21__

Image Credits: Omnibiz

This value chain can be digitalized to help retailers reduce working capital. Omnibiz allows them to connect with over 20 brands including Unilever and Procter & Gamble.

The B2B E-commerce Retail Company is currently located in Nigeria’s four largest cities, Lagos, Abuja and Port Harcourt. Rustagi says that the company plans to add Kano and Ibadan before August ends.

Omnibiz, Rustagi’s account, will draw on his previous business, VConnect. Despite its huge popularity as a local market, it struggled to scale and monetize. __S.27__

We knew a lot about small businesses, and the technology that they liked. This was our specialty, but it didn’t help our business model. __S.30__ He said that we have seen a 30% increase in monthly sales over the past 12 months.”

In the past few years, B2B informal electronic commerce has experienced a revival. Sokowatch Kenya, Twiga and TradeDepot Nigeria have all fought for the market leader positions in their markets.

As all of the mentioned startups raised funds this year, it sparked more interest in them activities. This includes newcomers Omnibiz and Kenya’s MarketForce.

While some operate assets-lightly, others manage the entire digitization process. Rustagi feels the latter is better for his company as it allows distributors to expand rather than decrease their reach.

“I believe scaling up in one city is possible with the right assets. __S.38__ We have good control of the company because we adopted the tech-first approach. __S.40__

V&R Africa and Timon Capital led Omnibiz’s seed round. Tangerine Insurance was also involved. __S.42__ The company now has a total investment of $4 million. Rustagi revealed that Seedstars also funded the company and the company will be participating in the accelerator’s growth program.

I believe Omnibiz can be the model of B2B retailing in Africa, and it will scale up well to other emerging markets. V&R Africa’s Raj Kulasingam, Vishal Agarwal and Vishal Bhatta released a statement expressing their excitement and joy at supporting Omnibiz beyond capital. __S.47__

Omnibiz plans to use its investment in the expansion of other West African cities, including Accra, Takoradi and Kumasi, over the coming months. The top three categories of the Omnibiz platform are food, baby products, non-alcoholic drinks, personal care and personal care. It plans to grow into other categories such as OTC drugs and alcoholic drinks.

Omnibiz will use the funding to develop new products for retailers. Omnibiz will partner with other companies to improve the availability of working capital for retailers, and to provide digital tools that allow them to run their businesses more efficiently.

We plan to recruit medium-sized manufacturers that have difficulty getting the final-mile delivery to customers. They want them to be scaled so that they reach large numbers of retailers. __S.55__

Publiated at Tue 10 August 2021, 09:14:54 +0000

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