Nigerian logistics startup Fez Delivery raises $1 million funding to expand operations
Fez Delivery, a logistics and delivery company, announced its $1 million seed round.
Ventures Platform led the funding round, with participation from Voltron Capital, Acasia Ventures (formerly Cairo Angels), and other angel investors. This funding announcement follows Fez Delivery's acceptance as one of the only two logistics companies in Nigeria to have received investment from Techstars Toronto, an elite global tech accelerator.
Fez Delivery was founded in 2020 by Seun Alley, as a pivot from her previous company which offered janitorial services to businesses but suffered from absenteeism of the janitors because they were running errands for employees. “We launched a janitorial service company in 2016. The following year, we observed a trend of janitors being absent from their duty posts because they were on errands for employees.”, says Seun Alley. “As a stop-gap, we introduced delivery services to the companies we were working with so that our janitors could focus on their work. It was wildly successful. This experience made us realise that last-mile logistics is a significant problem for SMEs and individuals. We decided to address this problem by creating a platform that allows businesses and individuals to easily track their items online in real-time, without using multiple logistics partners.”
The logistics industry is one of the fastest-growing industries in Nigeria, spurred by the meteoric rise in online shopping which generated an estimated revenue of $5 billion in 2019 with an expected CAGR of 20.5% from then till now. The size of this opportunity has led to the rise of many logistic businesses in the country. Yet, many struggle to differentiate themselves and run a sustainable business.
Fez Delivery distinguishes itself in the market by offering tailored and hybrid solutions that combine physical touchpoints with technology to serve its customers. “Our learnings over the last seven years have revealed that different business priorities exist regarding last-mile delivery”, says Seun Alley. “For FinTech, reach is critical.
For Pharma, the estimated delivery time is a big deal, and the pricing must be competitive for SMEs. Therefore, we have built an array of tech-enabled solutions; mobile and web apps (targeted at individuals), dashboards and APIs (for businesses) alongside a wide physical reach that spans all the 36 states in Nigeria, including the FCT ''.
The three-year-old startup makes money by charging individuals per delivery, and businesses a monthly subscription. In 2022, the logistics startup completed 200,000 trips and grew revenue by 20% month-on-month. Its clientèle includes the likes of Flutterwave, Kuda Bank, Moniepoint, OPay, Famasi Africa, and Red Bull.
Marketing Manager, Redbull Nigeria, Toheeb Azeez, says, “Fez Delivery has been a reliable and affordable delivery service for our company, since their inception. They have a wide reach across all the 774 local governments in Nigeria, which makes it easy for us to get our products to our customers quickly and efficiently. We are also impressed with their customer service, which is always prompt and helpful”.
Speaking on how they will deploy the capital, Seun Alley says that the company will continue its push towards leveraging technology to solve real problems. “With this funding, we are repositioning as a full-fledged tech company focused on last-mile deliveries. While the platform is currently in development, interested parties can sign up to join the waitlist.
The co-founder and CTO, Oluwafemi Jose adds that “our goal has always been to create something truly transformative. We're excited to use this funding to accelerate our innovation; expand our team, deepen our development efforts and bring more value to our customers and partners.”
General Partner, Ventures Platform Fund, Dotun Olowoporoku says “We are excited to partner with Fez Delivery in their mission to bring efficiency to the logistics industry. This industry is characterised by high fragmentation, demand-supply mismatch, and lack of transparency, due to heavy manual processes. Seun, a second-time founder, is an excellent operator with a solid vision for the future of last-mile delivery. By developing technology to enable other market players to thrive, Fez Delivery is well-aligned with our investment thesis to support market-creating innovation in underserved industries."
Fez Delivery will continue to deepen its work in Nigeria before considering other African markets. “We're currently focused on the $10 billion transport and logistics market in Nigeria, where we still have room to grow. We plan to keep growing in Nigeria and expand to other markets starting in the last quarter of this year. Ghana, Kenya, and South Africa are on our list, but we haven't decided on the order yet”, says Seun Alley.