Fez Delivery, a Lagos-based last-mile logistics startup with hubs throughout Nigeria, has raised $1 million in funding.The funding round was led by pan-African investor Ventures Platform with contributions from Voltron Capital, Acasia Ventures, and several other angel investors.
According to the company’s founder and CEO, Seun Alley, the funds will be used to expand its reach in Nigeria, which has a $10 billion transport and logistics market.From Q4 2023 on, the startup aims to expand into other African markets, including Ghana, Kenya, and South Africa. The startup also intends to increase its marketing efforts, improve operational efficiency, hire more staff, a
Fez Delivery was fonded in 2020 by Alley, who worked for over a decade in Nigeria’s banking sector and later in startups such as OPay and Bloc.It was a spin-off from a B2B janitorial service and side hustle she opened two years prior. While running the business, Alley received several complaints from her customers regarding the janitors: Although they did thorough cleaning in the mornings, they were primarily absent to carry out the necessary touch-ups throughout the rest of the day. “We realized that this happened because the janitors went on lots of errands for our clients’ employees. And the reason for this, we learned, was because most of the places they were buying stuff from did not have a dispatch or logistics service.”
While logistics is one of Nigeria’s fastest-growing industries, it is also one of its most fragmented. The millions of dollars invested in startups operating in various areas, from haulage to the last mile, have yet to build sustainable businesses.
According to Alley, startups and small businesses still encounter challenges regarding pricing, reach, and delivery times in the last-mile category, which are the problems that Fez Delivery’s solutions address. Mobile and web apps are available for individual customers to place and track orders, manage expenses, compile data on specific business points, and make payments. On the other hand, the startup provides APIs and dashboards to its business clients. Fez Delivery claims to have more than 17,000 customers utilizing its platform, with 70% being individuals and 30% being SMEs and startups.
Last year, the startup launched a vertical, FEZ for fintechs, which helped fintechs deliver debit cards and POS terminals to all of their customers and agents throughout Nigeria.
The startup also developed a SaaS platform to onboard and verify trained third-party two-wheeler logistics platforms with fleet sizes of approximately five to ten to help complete orders that it cannot fulfill. These third-party partners share in the revenue Fez Delivery generates by charging individuals per delivery, based on the distance covered and the size of the items, and businesses a monthly flat-fee subscription, based on a set range of deliveries.
Fez Delivery completed 200,000 trips last year and increased revenue by 20% month-on-month, according to the statement. Flutterwave, Kuda Bank, Moniepoint, OPay, Red Bull, and Famasi Africa are among its clients, the statement added.
The platform, which is backed by Techstars Toronto, faces competition in Nigeria, including Uber, via its Uber Connect product, Kwik Delivery, and Gokada, among other upstarts. However Fez Delivery says it uses a hybrid model, which combines on-demand and hub-and-spoke models. “We pick items from customers in bulk and take them to a central location where they’re zoned before assigning them to riders to complete,” she explained. “So I like to refer to Fez as running a hybrid model. We have the technology and still own 30% of the assets on our platform.