Fez deliverya Lagos-based last-mile logistics startup with hubs in Nigeria, has raised $1 million led by pan-African investor Ventures Platform with participation from Voltron Capital, Acasia Ventures and other angel investors.
founder and director Seun Alleysaid in a statement that the company intends to use the seed investment to deepen its work in Nigeria (which has a $10 billion transportation and logistics market) while considering expansion – from Q4 2023 – into other African markets, including Ghana, Kenya and South Africa. The startup also plans to improve its technology and operational efficiency, hire more talent and increase its marketing spend.
Alley, who worked in Nigeria’s banking sector for over a decade and later in startups such as OPay and Bloc, founded Fez Delivery in 2020. It was a spin-off of a B2B cleaning service and sideline she opened two years earlier. While running the business, Alley received several complaints from her clients about the janitors: While they did a thorough cleaning in the mornings, they were mainly absent to make any necessary adjustments for the rest of the day. “We realized this was happening because the janitors were doing a lot of errands for our customers’ employees,” the CEO told businesskinda.com over the phone. “And the reason for this, we learned, was that most places where they bought stuff didn’t have a shipping or logistics service.”
The situation is typical of many businesses across Nigeria, as evidenced by a simple market survey Alley conducted before launching Fez Delivery. Alley said she spoke to entrepreneurs and small business owners, including those outside and within her circle, to ask about their top concerns: talent and logistics were at the top of the list.
While Ilogistics is one of Nigeria’s fastest growing industries, but also one of the most fragmented. The industry is still in its infancy in many parts of Africa and has barely scratched the surface, though the millions poured into startups – active in various facets from transport to last mile – have yet to build sustainable businesses. Meanwhile in the last mile categoryPpricing, reach, and delivery times are common issues faced by startups and small businesses; these features are what Fez Delivery’s solutions optimize for, according to Alley. Individual customers can access the services through mobile and web apps to place and track orders, manage expenses, collect data on specific business points, and make payments. On the other hand, the startup offers APIs and dashboards to its enterprise clients. Fez Delivery claims to have more than 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 deliver debit cards and POS terminals to all their clients and agents across Nigeria. To meet demand, Fez Delivery recently developed a SaaS platform to onboard and verify trained logistics platforms for third-party two-wheelers, with fleet sizes of approximately five to ten, to assist in completing orders that can’t run it. These third-party partners share in the income Fez Delivery makes by charging individuals per delivery (based on the distance traveled and the size of the items) and companies for a fixed monthly subscription (based on a fixed number of deliveries).
Fez Delivery said it completed 200,000 trips last year and increased sales by 20% month-over-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 others. Alley argues that Fez Delivery’s differentiator is in its model; while others operate on-demand, her startup is a hybrid of on-demand and the hub-and-spoke model. “We bulk pick up items from customers and take them to a central location where they are zoned before being assigned to riders to complete,” said the CEO. “So I like to refer to Fez as a hybrid model. We have the technology and still own 30% of the assets on our platform. What that does is that if third party partners don’t show up for any reason, we have backup and can complete our deliveries ourselves. So for us, we think that gives us an edge as we also own a significant amount of assets while also providing technology.
Speaking about why Ventures Platform invested, Dotun Olowoporoku, general partner at Ventures Platform, said in a statement that his company decided to support Fez Delivery because its technology, which enables other market players to thrive, aligns well with the company’s investment thesis. to support market-creating innovation in underserved sectors such as logistics.
“I have realized that we can build and create solutions around payment and core fintech. But there are other issues within the ecosystem that no one is looking at, one of which is logistics,” noted Alley, who also spent a brief stint at mobility fintech Moove, when asked why she was building in the logistics and delivery space rather than fintech , in which she has several years of experience.
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