Deepankar Rustagi's OmniRetail has garnered significant attention, particularly after securing funding in 2022 amid growing investments in African startups focused on supply chain and operational efficiencies within the fast-moving consumer goods (FMCG) sector. This surge in funding positioned the sector as second only to fintech in attracting investment. However, recent trends indicate a cooling in industry enthusiasm and venture capital engagement, with numerous business models encountering substantial obstacles.

OmniRetail, under Rustagi's guidance, aims to revolutionize informal retail in Nigeria and West Africa through technological solutions and embedded finance, maintaining a focus on scalability and profitability. The company's vision is bolstered by a $20 million Series A equity funding round, intended to fuel expansion across Nigeria, Ghana, and Ivory Coast, with a particular emphasis on embedded finance solutions. The funding was co-led by Norfund, a Norwegian development finance institution, and Timon Capital, a Lagos-based VC firm, with additional participation from Ventures Platform, Aruwa Capital, Goodwell Investments (via Alitheia Capital), and Flour Mills of Nigeria. This investment marks Norfund’s first direct equity investment in an African startup, positioning OmniRetail advantageously in a market where profitability has proven elusive for many.

Since its inception in 2019, OmniRetail has accumulated $38 million in equity and debt. Its business model is centered on digitalizing order management for 145 manufacturers and over 5,800 distributors, thereby serving more than 150,000 informal retailers across 12 cities in Nigeria, Ghana, and Ivory Coast. The OmniRetail app enables retailers to place inventory orders, access working capital, and process digital payments. This framework is underpinned by a logistics network of over 1,100 vehicles and distributed warehousing managed by 85 local logistics partners. The company’s asset-light model has been crucial in achieving profitability.

In 2023, the Lagos-based B2B e-commerce platform achieved EBITDA positivity and is targeting net profitability by 2024. Cartona, a similar B2B e-commerce platform in Egypt, is also approaching profitability with a comparable business structure. The CEOs of both companies emphasize the vast potential within Africa’s informal market, advocating for technological enhancements to support suppliers and distributors rather than outright replacement. According to Rustagi, OmniRetail’s path to profitability is rooted in the efficient utilization of assets within its network, underscoring the sustainability and scalability of its “network of networks” model. Additional capital is sought to accelerate expansion into new regions and product categories, with a growth strategy that prioritizes optimization alongside scaling.

Rustagi also noted that enhancements in warehouse utilization, optimized logistics routes, and greater engagement across product categories will further boost profit margins. In a TechCrunch interview alongside OmniRetail’s investment lead, Archit Bagaria, Rustagi highlighted the company's success as stemming from a deep understanding of the FMCG retail ecosystem, leveraging the leadership team’s extensive collective experience. This expertise provides a significant advantage in understanding value chain dynamics, identifying key stakeholders, and addressing visibility gaps. Bagaria explained that while goods have traditionally moved from point A to point B, a lack of transparency has hindered financial inclusion and created inefficiencies. By creating an ecosystem that clarifies this landscape, OmniRetail aims to tackle these issues.

Bagaria stated that as a startup reaches a critical mass, integrating services like payments and buy-now-pay-later (BNPL) options becomes more straightforward within the established framework. He emphasized that OmniRetail’s strategy diverges from traditional approaches and that they believe they've unlocked success through their unique model. Unlike other startups that rushed into the credit market, OmniRetail waited until a robust distribution framework was in place and substantial data had been gathered. Last year, OmniRetail processed over ₦1.3 trillion (~$810 million) in transactions, with its BNPL service, Omnipay, disbursing ₦19 billion monthly (~$12 million) in inventory credit, with nearly no defaults.

The acquisition of Nigeria’s merchant solutions platform Traction Apps in 2024 has further reinforced OmniRetail’s strategic positioning. Traction provides a range of payment solutions, including POS terminals, PSSP, Super Agent licenses, and access to retailer-level sales data. This acquisition enables OmniRetail to develop a comprehensive financial profile for each retailer, enhancing supply chain management and facilitating customized financial solutions. Rustagi emphasized that every transaction within the FMCG value chain involves both the movement of goods and the flow of cash, positioning OmniRetail to capitalize on every transaction throughout the value chain to enhance profit margins. The company aims to replicate the success of international players in the Nigerian market.

While OmniRetail no longer discloses GMV figures, it reports a 35% increase in net merchandise volume (NMV) and a 40% rise in revenue over the past year, all while maintaining profitability during its growth. The company’s strategies include securing significant debt for inventory financing, pursuing strategic acquisitions, and maintaining steady profitable growth. The new $20 million in funding will be used to expand its retailer network and explore new product categories such as personal care, home care, and cold storage. The funds will also enhance infrastructure, refine credit underwriting tools, and strengthen partnerships with local debt providers. Bagaria added that future plans include raising debt for inventory financing and pursuing strategic acquisitions.

For Norfund, OmniRetail represents more than just a fintech or commerce initiative, it symbolizes critical infrastructure. Norfund Investor Director Cathrine Conradi stated that embedded finance is one of the most transformative tools for empowering small businesses in Africa, and OmniRetail’s model directs capital into areas that traditional systems have often overlooked. Timon Capital, which has supported OmniRetail from its beginning, views this as a significant milestone for the company, noting that OmniRetail has reached a crucial juncture in distribution, payments, and credit, demonstrating the substantial profitable growth attainable with their expanding presence.