Fez Delivery, a Lagos-based last-mile logistics startup with hubs throughout Nigeria, has successfully raised $1 million in funding. Ventures Platform, a pan-African investor, led the investment round, with contributions from Voltron Capital, Acasia Ventures, and several other angel investors.
The company's founder and CEO, Seun Alley, revealed that the funds will be used to expand its reach in Nigeria, which boasts a $10 billion transport and logistics market. Fez Delivery also intends to increase its marketing efforts, improve operational efficiency, hire more staff, and enhance its technology. From Q4 2023 on, the startup is looking to expand into other African markets, including Ghana, Kenya, and South Africa.
Fez Delivery was established by Alley in 2020 after working in Nigeria's banking sector for over a decade, as well as at startups such as OPay and Bloc. It was a spin-off of a B2B janitorial service and a side business she established two years prior. Alley discovered that many of her customers were unhappy with the janitors' performance since they spent most of their time running errands due to the absence of dispatch and logistics services at the places they shopped. This situation is prevalent in many Nigerian businesses, as a simple market study conducted by Alley before launching Fez Delivery revealed. According to the research, talent, and logistics were the most pressing issues for entrepreneurs and small business owners.
Logistics is one of Nigeria's fastest-growing industries, but 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 often encounter challenges with 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 two-year-old 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. To meet the demand, Fez Delivery recently 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. Alley argues that Fez Delivery's differentiator is its 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.
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