cost, a Nigerian online grocery store for fresh produce and packaged food, has raised $1.3 million in seed funding, backed by Samurai Incubate; a Japanese VC who also participated in the 2021 pre-seed round of the startup, SOSV, ELEA, Hi2 Global, Chui Ventures and ex-Unilever executive David Mueithi.
Following the new funding, the startup joins several African food e-commerce startups, including South Africa’s Yebo Fresh and Morocco’s Terraa, which have raised funding this year, while venture capitalists continue to minimize their operations.
Pricepally said it will use the funding to expand beyond the three cities it currently serves in Nigeria and to re-introduce group buying to deliver on its promise of enabling consumers to buy food that cheap. The startup facilitates same or next day delivery of products ordered through its digital channels including the app and WhatsApp chatbot. It has a network of fulfillment centers within three cities that it currently operates but outsources delivery services.
Luther Lawoyin (CEO), Deepak Bansal (CTO), Mosun Lawoyin (CXO) and Jummai Abalaka (COO), launched Pricepally in 2019 to reduce food costs, ensure availability, and keep prices predictable amid shortages and rising prices: exacerbated by rise in inflation.
The startup says it sources fresh produce directly from farmers, some of which is contracted, and packaged food from manufacturers. Lawoyin (CEO) told TechCrunch that the prices of products are always negotiated, which, combined with short food supply chains, ensures that the cost of its supplies is affordable.
“We have more control over quality and supply because we have specific farmers who supply specific products. We also do price research in local markets and our prices are very fair and that simply because we have got many layers of middlemen. The idea now going forward is to leverage our search power to solve one of the biggest problems in Nigeria today, which is food insecurity,” said Lawoyin.
“In many ways we are more than selling products. We bring transparency and visibility to the market.
Lawoyin lists transparency as the main contributors to Pricepally’s steady growth in customer accounts and its high customer retention. Its current buyers account for more than 80% of its earnings: a testament to its value.
The startup targets retail buyers, who make up 70% of its customers because unlike businesses, they pay upfront, are cheaper to acquire, and have higher margins, Lawoyin said.
The startup expects that the reintroduction of online group buying, which will enable more retail customers to come together to unlock wholesale prices, will help accelerate its growth as food prices continue to rise. biting Besides, it is also looking to open new customers until April, the newly launched WhatsApp chatbot targeting the mass market in Nigeria, one of the countries with the highest usage of WhatsApp in the whole world.
Comment on the deal Rena Yoneyama of Samurai Incubate told TechCrunch: “The amazing thing about Pricepally is their ability to execute. There are a lot of difficulties in e-commerce in Nigeria, and a lot of things that work normally in other big cities in Africa often don’t. operate due to lack of hard and soft infrastructure and trust issues.
“However, Pricepally has worked hard to improve service quality, increase customer satisfaction, gain customers’ trust, and build a high percentage of repeat customers. Their healthy economic unit and continued business growth proves that.”