Fez Delivery raises US$1m in seed funding

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Logistics startup Fez Delivery has raised US$1m in a seed funding round, led by Ventures Platform.

The funding round included participation from Voltron Capital, Acasia Ventures (formerly Cairo Angels) and other angel investors. This funding announcement followed investment from tech accelerator Techstars Toronto.

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. As a stopgap, the company introduced delivery services to the companies it was working with so that its janitors could focus on their work. Following an unexpected amount of success, the company decided to create a platform that enabled businesses and individuals to easily track their items online in real time, without using multiple logistics partners.

The three-year-old startup makes money by charging individuals per delivery, and businesses a monthly subscription. In 2022, the 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. According to Fez Delivery, 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 US$5bn in 2019 with an expected compound annual growth rate (CAGR) of 20.5% from then till now.

Speaking on how they will deploy the capital, Alley said that the company will continue its push toward leveraging technology to solve 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. Our learnings over the last seven years have revealed that different business priorities exist regarding last-mile delivery. For fin-tech, 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 36 states in Nigeria, including the FCT [Federal Capital Territory].”

Fez Delivery will continue to deepen its work in Nigeria before considering other African markets. “We’re currently focused on the US$10bn 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,” Alley said.

Toheeb Azeez, marketing manager at Red Bull Nigeria, commented, “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”.

Oluwafemi Jose, co-founder and chief technology officer, stated, “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.”

Dotun Olowoporoku, general partner, Ventures Platform Fund, said, “We are excited to partner with Fez Delivery in their mission to bring efficiency to the logistics industry. This industry is characterized 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.”

Read more key last-mile updates from the parcel and postal technology industry, here.

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