In April, Flour Mills of Nigeria (FMN), a 64-year-old manufacturing titan, transitioned from customer to shareholder in OmniRetail, a B2B e-commerce startup that has been ranked the fastest-growing business in Africa twice. FMN, one of the 145 manufacturers that use the platform to sell to retailers, co-invested $20 million in the startup. That was an uncommon step for traditional Nigerian companies, most of whom prefer to collaborate with rather than buy equity in local startups.
Globally, this kind of investment, corporate venture capital (CVC), where large companies fund startups, has been on the rise. It has tripled between 2014 and 2024, accounting for over 46% of venture capital deal value. Some foreign CVC firms, like Axa Venture Partners, Mobility54, and Coinbase Ventures, and some non-Nigerian ones like South Africa’s Absa Bank, have extended their interest to Nigerian startups. However, CVC activity from Nigerian traditional businesses continues to lag, despite exits delivering as much as 29x returns.
Flour Mills’ recent investment adds to a small but growing number of traditional firms embracing startup investments, driven by financial returns and the need for strategic leverage. As technology reshapes commerce—from mobile point-of-sale systems overtaking ATMs to innovations in last-mile logistics—such investments may become lifelines for legacy companies seeking to stay competitive.
“Traditional companies don’t always have the flexibility to build these capabilities internally,” said Akwugo Onuekwusi, an expert in fundraising and financial advisory. “Investing in startups offers them optionality and a moat, especially when the technology touches a core operational pain point.”
OmniRetail is solving a big problem for Flour Mills
Africa’s retail market is a sprawling headache: 90% of Nigerians shop at informal kiosks, market stalls, and mom-and-pop stores. In Nairobi, the number is 87%. Manufacturers like Flour Mills go through a cascade of wholesalers and distributors to reach these traders. The cost of the items increases at every handoff, while inflation, currently at 23.71%, erodes consumer purchasing power.
OmniRetail is one of several startups trying to solve this problem. The platform currently connects 145 manufacturers, including Flour Mills, to 150,000 retailers through an asset-light “network of networks.” With 85 partner warehouses and 1,100 third-party trucks, OmniRetail delivers goods directly to retailers’ doorsteps. Its collateral-free financing model allows cash-strapped vendors to stock up, ensuring consistent demand for manufacturers’ products. Beyond logistics, the startup’s real-time data on demand trends, stock levels, and retailer preferences enable manufacturers to find and meet demand.
Flour Mills has had first-hand experience of the impact of this system on its business.
“Distribution is key in the fast-moving consumer goods (FMCG) sector, and OmniRetail seems well on its way to building the engine that powers distribution of the future,” Oo Nwoye, an angel investor, told . Nwoye notes that this will deepen its alliance with the startup and give the company better insight into the distribution value chain, across pricing, demand, and logistics. It could also give Flour Mills a foothold in the future of the FMCG industry.
OmniRetail told that the investment was a vote of confidence from Flour Mills and a sign of shared long-term interest.
“It came after years of partnership where we demonstrated measurable value—improved sell-through, real-time data insights, and reduced logistics costs,” the company said in an email to . “[The investment] reflects FMN’s broader strategy to deepen its distribution footprint, digitise its route-to-market channels, and strengthen retail intelligence, particularly in segments where traditional systems lack transparency and speed. This [investment] deepens our alignment beyond supply chain support—it’s now a strategic partnership for growth.”
A key partner in a new era for Flour Mills
Flour Mills’ investment comes at a pivotal moment in its 64-year history. In 2024, the company, majority-owned by a shipping conglomerate, delisted from the Nigerian Exchange Limited (NGX) and plans to restructure its 22 business units into five standalone entities and pursue a pan-African expansion under the African Continental Free Trade Area (AfCFTA).
“We aim to attract both technical and financial partners to support the growth of our sugar operations and food business,” said John Coumantaros, the company’s chairman.
OmniRetail told it is positioned to support Flour Mills’ expansion plans. Nigeria is its biggest market, as the platform already supports cross-border operations in Ghana and Francophone West Africa for all its manufacturers. With OmniRetail’s technology, FMN can manage multi-country distribution, local demand forecasting, and view real-time product performance across regions from a single dashboard—key capabilities for any expansion.
Beyond distribution and credit, B2B platforms offer real-time market data: demand trends, stock levels, and customer preferences. This gives manufacturers a clear view of the pulse of new markets, enabling faster entry and sharper operations to compete better with other manufacturers.
Nwoye told that this acquisition could be a proactive defensive move against their competition in the future. “Any FMCG company that acquires the platform would have access to better insight, distribution tech, and network than other competitors, even those who use the platform.”
This echoes the dynamics of Microsoft’s investment in OpenAI. Just as Microsoft understood the future significance of advanced AI and sought to embed itself within its development in the leading AI startup, Flour Mills likely sees OmniRetail’s asset-light network and data capabilities as a critical infrastructure for the future of FMCG distribution in Africa. Their investment ensures they have a strong voice in its evolution and prevents competitors from leveraging its unique advantages to gain an insurmountable lead.
However, this investment poses a question about what Four Mills’ new relationship means for competitors who also use OmniRetail. As a significant investor, Flour Mills’ influence over OmniRetail’s development and data could create an uneven playing field for other manufacturers relying on the same infrastructure.
But OmniRetail told that it will continue to operate as a multi-manufacturer platform and that Flour Mills’ investment does not come with exclusivity around product distribution or access to competitor data.
“We’re committed to maintaining a level playing field for all manufacturers on our platform, ensuring trust, neutrality, and fair access to market intelligence across the board,” the company said.
Moreover, Flour Mills is not the first manufacturer to invest in OmniRetail. In 2022, Chandaria Industries, the largest tissue and hygiene products manufacturer in Kenya, co-invested in OmniRetail through its CVC firm, Chandaria Capital.
Is there an acquisition on the horizon?
Experts who spoke to noted that this funding puts an acquisition on the table. “This is good and could also form a valuable exit partner for OmniRetail, especially if Flour Mills wants to build out a distribution play,” Onuekwusi told .
Globally, it’s common for investors to acquire high-performing startups they’ve previously invested in. For instance, Stripe led Paystack’s Series A funding before acquiring the company two years later.
Considering the limited capital available in local stock markets, acquisitions can be a crucial way for African startups to provide returns for their investors. However, unlike cash-flush startups, which often prioritise quickly gaining a large share of the market and unique product features, traditional corporations typically evaluate a startup’s worth by focusing on how well it fits with their existing rules and regulations, the risks involved, and whether it aligns with their overall business plans.
While market share, profitability, and how easy it is to use the product are considered, these usually matter less than ensuring a solid strategic fit and low risk. However, OmniRetail presents a strong case by showing a remarkable ability to combine innovative new ideas with dependable stability and profitable growth. The company has achieved a compound growth rate in revenue of 71,818.4% and 795.9% in compound annual growth, building on a revenue of $120.15 million in 2023.
OmniRetail is an attractive target for any fast-moving consumer goods (FMCG) company looking to expand, especially one like Flour Mills, which is planning to go private and relist on two stock exchanges in the future.
However, OmniRetail and Timon Capital, one of OmniRetail’s earliest investors, which also participated in this round, declined to comment on the possibility of an acquisition.
Flour Mills did not immediately respond to requests for comments on any parts of this article.
Even if a Flour Mills acquisition isn’t imminent, this equity investment remains a significant cause for celebration, especially given OmniRetail’s recognition as a top-performing, fast-growing company in Africa. This move could signal a broader awakening among local corporations to the strategic and financial potential of directly investing in startups.
