Investors Flock Ibadan, Pours $10.5M Into Ecommerce Startup Alerzo

The majority of startup investments in Nigeria are centered in Lagos, the country’s main commercial hub. However, investors appear to be increasing trust in Nigeria’s other cities, following the relative success of firms such as Safeboda and Gokada, among others, after they were pursued from Lagos in the now-famous ban on bike-hailing activities. The new investment in Alerzo, a B2B e-commerce retail startup based in Ibadan, Nigeria, has further confirmed reality.

Alerzo has announced that it has raised $10.5 million in a Series A round led by Nosara Capital of London. The round also included FJ Labs and various family offices from the United States, Europe, and Asia, including Michael Novogratz’s.

“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,” said Adewale Opaleye, founder and CEO of Alerzo.

Alerzo has raised more than $20 million in total since its inception. The Baobab Network, a London-based Africa-focused accelerator, and Signal Hill, a Singapore-based fund manager that invested in the company’s $5.5 million seed round last year, are among the early investors. In order to better serve its customers, the company has also announced the closing of a $2.5 million working capital facility.

Alerzo claims to have a network of up to 100,000 small enterprises, 90 percent of which are run by women. Ibadan, Ekiti, and Abeokuta, to name a few, are among the tier-2 to tier-4 cities in Southwest Nigeria that the company serves solely. It connects retailers with consumer brands including Unilever, Nestlé, Procter & Gamble, Dangote, and PZ, as well as local and multinational distributors.

Also, Approximately one-third of Alerzo’s total retailers use the platform on a monthly basis. Retailers may order products via SMS, phone, or WhatsApp, and have them delivered to their stores in less than 10 hours, according to the company’s website. The startup also claims to have processed over 1 million orders in 2020.

Alerzo was launched in 2018 by Adewale Opaleye as a last-mile distribution network that assists shops in receiving merchandise directly from producers. Its mission, which began in 2019, is to assist street sellers and retailers in Nigeria’s south-western cities in obtaining household products more quickly and efficiently.

According to the founder, Ibadan was the best location for the company’s headquarters because informal shops in the region face more obstacles than those in Lagos.

To process these orders, Alerzo owns and controls its full-stack tech-driven supply chain and logistics. Suppliers can use the company for warehousing and fulfillment, and informal retailers can use it for storefront delivery. To serve its hundreds of customers, it currently possesses approximately 200 cars and 20 warehouses.