In 2022, Deepankar Rustagi raised funds for OmniRetail, a company focused on addressing supply chain and operational challenges in the fast-moving consumer goods (FMCG) sector across Africa. At the time, African startups in this domain were attracting significant investment, surpassing other sectors except fintech.
Recently, the enthusiasm and interest from venture capitalists in this industry have waned as various business models faced increasing challenges.
OmniRetail, however, distinguishes itself from other B2B commerce platforms by aiming to transform informal retail in Nigeria and West Africa utilizing technology and embedded finance for scalable, profitable growth. This ambition was reinforced by a $20 million Series A equity funding round, which will support OmniRetail’s expansion in Nigeria, Ghana, and Ivory Coast, with a focus on embedded finance products.
The funding was co-led by Norfund, a Norwegian development finance institution, and Lagos-based VC firm Timon Capital. Participants also included Ventures Platform, Aruwa Capital, Goodwell Investments (via Alitheia Capital), and Flour Mills of Nigeria.
This investment marks Norfund’s first direct equity involvement in an African startup. According to Rustagi, it positions OmniRetail to dominate a segment where others have struggled to achieve profitable growth. Since its inception in 2019, OmniRetail has raised $38 million in equity and debt.
OmniRetail’s model digitizes order management for 145 manufacturers and over 5,800 distributors, serving more than 150,000 informal retailers in 12 cities across Nigeria, Ghana, and Ivory Coast. Retailers use the platform to order inventory, access working capital, and make digital payments, supported by a third-party logistics network of over 1,100 vehicles and 85 local logistics partners.
The company’s asset-light strategy has contributed to its profitability. The Lagos-based B2B e-commerce platform reported EBITDA positivity in 2023 and achieved net profitability in 2024. A similar approach is seen in Egypt’s Cartona, which also leans on this model for profitability.
Both companies’ leaderships emphasize the potential in Africa’s vast informal market, which can become more efficient with the technological tools their platforms offer.
OmniRetail’s strategy emphasizes optimizing its network to enhance scalability and profitability. According to Rustagi, the model has validated its effectiveness, prompting further capital raising to expand in more regions and categories.
OmniRetail is also focused on better warehousing occupancy, smarter logistics routes, and deeper category penetration to improve margins. A deep understanding of the FMCG retail ecosystem is cited as a unique advantage for the company, as conveyed by OmniRetail’s head of investment, Archit Bagaria.
Bagaria explained that while goods have always moved across the supply chain, lack of transparency has caused inefficiencies. OmniRetail’s ecosystem aims to address these issues and streamline the process.
Once reaching critical mass, the platform can introduce additional services like payments and buy-now-pay-later (BNPL) options. This approach, based on significant distribution scale and data analytics, has allowed OmniRetail to achieve many successful transactions, such as processing over ₦1.3 trillion in transactions last year.
The acquisition of Nigeria-based merchant solution platform Traction Apps in 2024 has further supported OmniRetail’s strategy. With Traction’s payment capabilities, OmniRetail gains complete financial profiles of retailers, enhancing its control over the supply chain and enabling tailored financial solutions.
Rustagi emphasized the dual nature of FMCG transactions involving goods and funds movements, highlighting OmniRetail’s position to maximize value from these transactions. Despite expanding, the company has maintained profitability with a 35% increase in net merchandise volume and a 40% rise in revenue over the past year.
With $20 million in new capital, OmniRetail plans to grow its retailer base and expand into new product categories, upgrade infrastructure, enhance credit tools, and strengthen partnerships with domestic debt providers. It also plans strategic acquisitions and further debt raising for inventory finance, as outlined by Bagaria.
Norfund views OmniRetail as a significant infrastructural investment, with embedded finance playing a transformative role in the growth of small businesses in Africa, according to Investor Director Cathrine Conradi.
Timon Capital, an early backer of OmniRetail, regards this as a pivotal moment for the company, demonstrating its capacity for profitable growth in distribution, payments, and credit.
