Alerzo Believes they Can Build Another Lagos in Ibadan

By Sam Adeoye

At this moment in time, long, hot traffic jams are becoming a thing in Ibadan. The folks who live in that city are half-proud of this congestion because it sorts of presents them with a shared experience with the too-cool-for-school Lagosians. On the other hand, however, they desperately hate it because the whole point of Ibadan is that it’s less insane than Lagos — hustle-wise.

But my point with this article isn’t about the hustle or the bustle. It’s about the likelihood of replicating the vibrant tech ecosystem of Lagos in another Nigerian city. In this case, Ibadan.

You might think I’m only being delusional with this idea, but one brilliant start-up is suggesting that it is indeed possible to build a tech giant from over there. This start-up, ladies and gentlemen, is called Alerzo.

If you’ve never heard of Alerzo, consider yourself forgiven. I myself only knew of it last week when I had a conversation with the serial entrepreneur and start-up mentor known as Opeyemi Awoyemi. As you may recall, Mr Awoyemi has been a cofounder of some tech juggernauts, namely Jobberman, Whogohost, TalentQL, and Moneymie.

In the course of our chat, I asked Opeyemi this question: Now that Lagos has attained this reputation as Africa’s most vibrant start-up hub, is it possible to replicate the success of Lagos elsewhere within Nigeria?

As it turned out, this was a question he’d been giving a lot of thought. So, to me, he immediately said, Well, it depends. “Name a city and let’s talk about it.”

To which I said, “Ibadan.”

“Brilliant,” he said.

See, Ibadan has a lot going for it. One, it is West Africa’s largest city. It is also close to Lagos — just about 120km. Besides, one of Nigeria’s most active universities, as far as tech entrepreneurship is concerned, is only 75km away from Ibadan. I’m talking about the Obafemi Awolowo University, Ile Ife, aka OAU. Some of Nigeria’s best-funded tech companies were founded or cofounded by OAU alumni. Nomba (formerly Kudi), Farmcrowdy, 54Gene, SlimTrader, and PropertyPro are some of those companies.

Two, operating in Ibadan is considerably cheaper than it is Lagos. For instance, a four-room duplex in suburban Ibadan will rent for N1.8 million per year. Take a similar location in Lagos and the same property won’t cost you less than N3 million.

Then, there’s the new rail line that makes it easy to be headquartered in Ibadan and never miss ecosystem meetups and corporate meetings in Lagos. When the Lagos-Ibadan expressway is finally completed, it too should further shorten the distance between the two cities.

In the meantime, no other company is making better use of Ibadan’s remarkable standing than Alerzo.

Founded by Adewale Opaleye in 2018 to help small retailers stock their shops directly from manufacturers, Alerzo has raised more than $20 million in its seed and series A rounds. And it got some pretty savvy investors behind it, too. Big names such as the Africa-focused accelerator, Baobab Network; the Singapore-based Signal Hill; the London-based Nosara Capital; FJ Labs; and several family offices from Europe, Asia, and the US have put major money behind Alerzo, according to reporting by TechCrunch.

Opaleye, who is himself a native Ibadan man and the son of a mom-and-pop shop owner, has said his big idea for Alerzo came from watching his mother’s “many challenges”. The old lady, he said, ran two stores while raising four kids. So, Opaleye told TechCrunch, “I decided to start a business that uniquely catered to the needs of retailers just like her.”

While solving a problem close to home might sound pretty cool, the coolest part of this man’s idea is that it doesn’t even bother to recruit clients from Lagos, at least not yet. Yes, it does have a “Lagos Hub” in Victoria Island, but it has concentrated its business on Ibadan, Abeokuta, Ekiti and other towns like them in Southwest Nigeria. The company refers to these locations as Tier-2 to Tier-4 cities.

In just three years, Alerzo says its customer base has now expanded into about 100,000 small business in these towns. Through Alerzo, these retailers receive supplies from mega consumer goods manufacturers like Dangote, Nestlé, Procter & Gamble, and PZ Cussons.

Isn’t that something? Who would have thought that a billion-dollar tech-enabled logistics and FMCG supply company could spring from slow-paced Ibadan? I mean, for years, if you’d asked any of the thousands of young people relocating from Ibadan why they were hightailing it to Lagos, Nigeria’s most crowded metropolis, their answer was always direct and fast: “there’s no money in that town.”

Now, thankfully, it appears that things can be different. It’s just that for things to actually change, people would have to make them… change.

This is what Opeyemi Awoyemi was talking about. “Each State [of Nigeria] can look at the situation of the economy and decide what they want to be,” he said to me.

That’s indeed true. And pretty straightforward, too. There’s just so much that Lagos can do for Nigerian entrepreneurs. Because its resources are limited, competition for those resources will continue to drive up the cost of starting, and running, a business here. Which then presents an extraordinary opportunity to neighbouring States — for a start, Ogun and Oyo (which has Ibadan as its capital). These States can choose what role they’d like to play in this flourishing tech economy.

In this new era of WFH and remote employment, for example, all barriers to talent location are crashing down. Both TalentQL— the tech staffing recruitment portal, and uLesson — the on-demand tutoring company — have proven that, if you can set up Wi-Fi there, you can situate your software engineers and designers there. It doesn’t matter if it’s the pristine locality of Ile-Ife down in the south or the chilly hills of Jos, near the country’s centre.

And with Alerzo, the eye of the government should open to the truth about enabling environments for tech enterprise. Sometimes all it takes to encourage new ventures is an acceptance of new thinking. That and a transportation system that works, dedicated real estate layouts, and (or) tax breaks. When you make your place conducive for creators, and make sure they hear about it, and they’ll come.

Today, we talk about Nigerian start-ups being Delaware (USA) companies. There’s a reason Delaware became the go-to American state to register new corporations. As Mr Awoyemi said, Delaware decided what it wanted to be and it went straight for it.

Hopefully a Nigerian governor or one of his aides will read this article. Hopefully, it will start a conversation in their cabinet. Hopefully, they will do something life-changing with it.