Hard work and a lot of grit: CEO of Nigeria’s Pricepally reflects on the lessons learned as a founder
Pricepally Chief Executive Luther Lawoyin says he founded his fourth startup shortly after getting married when his wife starting taking note of their collective expenses and he realized just how much they were spending on groceries.
Speaking to CNBC Make It via telephone, Lawoyin said he couldn't understand the cause, as it wasn't something he had consciously monitored before. However, after conducting some research, Lawoyin said he realized that the high costs were partly due to inefficiency in the fresh food supply chain in Nigeria, where he lives, and across Africa.
This inefficiency is "chiefly due to the outdated and dilapidated infrastructure plaguing the continent," he said.
Pricepally, headquartered in the Nigerian city of Lagos, is an online store that enables people to shop for groceries in bulk at "deep discounts" because it connects them directly with farmers, manufacturers and wholesalers.
Lawoyin explained that there is a lack of integration between people in the supply chain, meaning "the farmer has no information on what the markets need."
"The rural to urban logistics companies have no structured information to convey goods, making intermediaries act at will with no understanding of connecting each stage smartly," he added. As a result, Lawoyin said the end consumer also has "no idea" where the food they buy is coming from or who farmed it.
"Overall there is a lack of data, information and collaborations that can make this food value chain a lot more efficient than it currently is," he said.
To make their own grocery shopping cheaper, Lawoyin and his wife, Mosunmola, decided to pool together with friends to buy fresh food in bulk more directly from producers, which is where the idea for Pricepally was born.
One of the biggest lessons Lawoyin said he'd learned in creating his own business was that "you need a lot of grit."
"There will be challenges every day, and you must solve them to move forward," he continued. "There is no alternative for hard work, and you must get the job done to achieve your vision."
'Classic chicken and egg problem'
A report by the United Nations' World Food Programme, published in October, said that the coronavirus pandemic "decreased income, drove up poverty, disrupted regional trade, supply chains and cross-border pastoralist activities, and inflated food prices in the Sahel (Burkina Faso, Chad, the Niger and Nigeria) and some coastal countries (Sierra Leone and Liberia)."
The report also referred to World Bank data, which showed that Nigeria's gross domestic product is forecast to have shrunk by 3.2% in 2020, down from an estimated 2.2% growth in 2019. But its consumer price index showed inflation is forecast to have risen to 13.8% in 2020, from 11.4% in 2019.
Lawoyin officially launched Pricepally in November 2019, shortly before the start of the pandemic. He said he felt the business was "well positioned" when it hit and other vendors started to increase prices due to the country's lockdown.
To fund the launch of Pricepally, Lawoyin had investment from his previous business, Lucy.ng, an online marketplace for branded merchandise. Pricepally has been backed by angel investors and institutional investors.
In addition, Pricepally received a split of Lagos State Government's innovation grant in August, sharing 100 million Nigerian naira ($244,185) with 22 other tech-led startups.
Despite having the funds to get the business off the ground, setting Pricepally up wasn't without its challenges. Lawoyin cited simultaneously generating demand and securing supplies as one particular example.
"The classic chicken and egg problem can be very tricky and challenging; setting up systems that guarantee both demand and supply in an environment where there is a lot of disorder is challenging," he said.
Beyond trying to provide a solution to high food prices in Lagos, Lawoyin hopes Pricepally can expand into other cities both in Nigeria and more widely in Africa, as well as developing other innovative alternatives to replace inefficient systems across the continent.
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