Nigerian online grocery market to see expansion via Pricepally, backed by $1.3 million in investment funds.
Introduction
In a significant development for the African e-commerce space, Pricepally, a Nigerian online grocery store that specializes in fresh produce and packaged food, has raised $1.3 million in seed funding. The investment round was led by Samurai Incubate, a Japanese venture capital firm that had also participated in Pricepally’s pre-seed round in 2021. This latest funding brings the total amount raised by the startup to a significant figure.
Key Highlights
- Investors: The seed funding was backed by a mix of local and international investors, including Samurai Incubate, SOSV, ELEA, Hi2 Global, Chui Ventures, and ex-Unilever executive David Mureithi.
- Use of Funds: Pricepally plans to use the new funds to expand its operations beyond the three cities it currently serves in Nigeria. The startup aims to increase its reach and make fresh produce more accessible to a wider population.
Company Background
Pricepally was founded in 2019 by Luther Lawoyin, Deepak Bansal, Mosun Lawoyin, and Jummai Abalaka. The startup’s primary objective is to reduce the cost of food, ensure availability, and provide predictable prices amid rising inflation. Pricepally sources fresh produce directly from farmers, some of whom are contracted by the company.
Key Features
- Same- or Next-Day Delivery: Pricepally facilitates same- or next-day delivery of ordered produce through its digital channels, including the app and WhatsApp chatbot.
- Network of Fulfillment Centers: The startup has a network of fulfillment centers within the three cities it currently operates in, but outsources delivery services.
Customer Retention
Pricepally’s existing buyers account for more than 80% of its revenues, which is a testament to the validity of its value proposition. Transparency is listed as one of the major contributors to Pricepally’s steady growth of customer accounts and high customer retention.
Growth Strategy
The startup mainly targets retail buyers, who make up 70% of its customers because they pay upfront, are cheaper to acquire, and have higher margins compared to businesses. Pricepally anticipates that the re-introduction of online group buying will help accelerate its growth as food prices continue to bite.
Reaction from Investors
Rena Yoneyama, a representative from Samurai Incubate, commented on the deal:
"The great thing about Pricepally is their execution ability. There are still many difficulties with e-commerce in Nigeria, and many things that work normally in other major African cities often do not work due to a lack of both hard and soft infrastructure and trust issues."
Future Plans
In addition to expanding its operations, Pricepally plans to increase its reach and make fresh produce more accessible to a wider population. The startup aims to leverage the new funding to drive growth and improve customer experience.
Conclusion
Pricepally’s $1.3 million seed funding is a significant development for the African e-commerce space. The startup’s focus on reducing food costs, ensuring availability, and providing predictable prices amid rising inflation makes it an attractive player in the market. With its strong execution ability and commitment to customer retention, Pricepally is well-positioned for growth and expansion.
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