Changing the Game in FMCG

In the fast-moving consumer goods (FMCG) sector, OmniRetail is not merely another player; it aims to transform informal retail across Nigeria and West Africa. Founded in 2019, the company focuses on leveraging technology and embedded finance to resolve supply chain challenges.

Recent Investment Boosts Expansion Plans

Recently, OmniRetail raised $20 million in a Series A funding round co-led by Norfund, a Norwegian development finance institution, alongside Lagos-based VC firm Timon Capital. This marks Norfund’s inaugural direct equity investment in an African startup.

To date, OmniRetail has garnered $38 million in equity and debt funding since inception.

Operational Achievements and Growth Strategy

OmniRetail has established a robust network, digitizing order management for 145 manufacturers and over 5,800 distributors, serving more than 150,000 informal retailers across 12 cities in Nigeria, Ghana, and Ivory Coast. The platform allows retailers to order inventory, access working capital, and make digital payments efficiently.

The company’s asset-light strategy has contributed to its financial success; it became EBITDA positive in 2023, followed by net profitability in 2024.

Innovative Approach to Embedded Finance

OmniRetail’s strategy involves waiting until it has scaled significantly before introducing additional financial services. This approach has allowed it to process ₦1.3 trillion (approximately $810 million) in transactions last year, with its buy-now-pay-later (BNPL) product, Omnipay, issuing ₦19 billion (~$12 million) in monthly credit, demonstrating nearly zero default rates.

Recent Acquisition Enhances Capabilities

In 2024, OmniRetail acquired Nigeria-based Traction Apps, which enhances its payment capabilities and provides insights into retailer-level sales data.

The acquisition enables OmniRetail to develop a comprehensive financial profile of each retailer, improving its control over the supply chain and enhancing its financial offerings.

Future Outlook and Strategic Goals

With the new funding, OmniRetail plans to broaden its retailer base and introduce new product categories, including personal care and cold storage. The focus will also extend to upgrading infrastructure, refining credit underwriting tools, and fostering relationships with local debt providers.

“Our journey towards profitability stems from our efficient network utilization. We aim for further optimization across all operations to maximize margins,” said Deepankar Rustagi, the CEO of OmniRetail.

Industry Implications and Investor Sentiment

For Norfund, the investment in OmniRetail signifies more than just a conventional financial move; it symbolizes infrastructure development in a region that requires innovative solutions for small businesses. “Embedded finance serves as a pivotal tool for small-scale growth in Africa,” noted Norfund Investor Director Cathrine Conradi.

Timon Capital considers this an inflection point for OmniRetail, emphasizing its capacity for profitable growth as it scales its operations in distribution, payment solutions, and credit offerings.