Nigeria’s Alerzo Caught in $3.7 Million Debt Dispute as Africa’s Startup Boom Confronts a Reckoning

Nigeria’s once-buoyant startup ecosystem is confronting a sobering reality check, and B2B e-commerce firm Alerzo has emerged as one of the latest high-profile casualties.

A debt dispute with Moniepoint Microfinance Bank has escalated into court action, freezing the company’s accounts and assets and intensifying scrutiny of Africa’s asset-heavy, venture-backed growth models.

At the center of the dispute is a ₦5 billion (approximately $3.7 million) facility approved in January 2025 to fund working capital and stabilize inventory supply. According to court filings, the outstanding obligation stood at ₦4.38 billion ($3.2 million) as of December 3, 2025, with interest continuing to accrue.

In January 2026, Nigeria’s Federal High Court in Lagos granted a Mareva injunction restraining financial institutions from releasing funds linked to Alerzo Limited and associated parties pending resolution of the suit. The order effectively froze access to the company’s accounts, tightening liquidity at a time when operating costs remain elevated.

A Growth Model Under Pressure

Founded in 2019, Alerzo positioned itself as a technology-enabled distributor serving neighborhood retailers. Its model sought to bypass traditional middlemen by connecting fast-moving consumer goods manufacturers directly with informal shop owners through digital ordering, embedded payments and last-mile delivery.

The pitch resonated during Africa’s venture capital surge between 2020 and 2022. The company raised more than $20 million in equity from investors including Nosara Capital, FJ Labs, Baobab Network and Signal Hill. A $10.5 million Series A round accelerated expansion across south-west Nigeria.

But the scale-up came at a cost.

Distribution is inherently capital intensive. Warehousing, vehicle fleets, fuel and staffing represent fixed outlays that do not easily compress when demand weakens. As Nigeria grappled with currency depreciation, higher fuel prices and softening consumer spending, Alerzo’s margins tightened.

The company reported reaching breakeven in the third quarter of 2021 while operating in two cities. National expansion, however, significantly increased overhead. Between 2022 and 2024, Alerzo reduced its workforce from more than 2,000 employees to fewer than 800 in successive rounds of layoffs.

The debt facility from Moniepoint was intended to reinforce working capital—ensuring consistent inventory supply to thousands of retailers. Instead, repayment challenges surfaced within months, underscoring the fragility of high-volume, low-margin distribution models in volatile macroeconomic conditions.

Asset Sale Speculation

Recent social media videos showing rows of Alerzo-branded motorcycles and buses parked at its Ibadan facility fueled speculation that the company was liquidating assets to meet obligations.

Chief Executive Officer Adewale Opaleye has rejected suggestions that Alerzo is winding down operations. He said the company is selling scrap assets and maintains that more than 400 vehicles remain in active service. According to Opaleye, the asset sales are unrelated to the debt proceedings and core operations continue.

Even so, the optics of parked fleets and frozen accounts have amplified concerns about the sustainability of the model.

A Broader Continental Pattern

Alerzo’s difficulties are unfolding against a backdrop of rising corporate distress across Africa.

In South Africa, data from Statistics South Africa showed 96 business closures recorded in the opening weeks of 2026. A report by BusinessTech noted that just under 100 businesses were liquidated in the first month of the year, with a quarter concentrated in finance, insurance, real estate and business services.

Asset-heavy sectors appear particularly exposed. Flexi Fuel Logistics (Pty) Ltd was recently placed into provisional liquidation. SA Relocations Group faces legal action after ceasing operations. Major logistics provider RTT is grappling with profitability pressures, while SA Express entered final liquidation in 2022.

Across the continent, currency volatility, fuel price fluctuations and tighter credit conditions have combined to test balance sheets. Venture capital funding, once abundant, has become more selective, with investors emphasizing unit economics and cash preservation over growth at all costs.

The Venture Boom’s Hangover

Between 2020 and 2022, African startups attracted record capital inflows. Investors, flush with global liquidity, prioritized rapid customer acquisition and geographic expansion. Many companies scaled headcount, fleets and physical infrastructure in pursuit of market share.

As global monetary policy tightened and risk appetite cooled, that playbook came under pressure.

For B2B commerce platforms like Alerzo, thin margins amplify risk. Success depends on efficient logistics, tight inventory control and disciplined cost management. Macroeconomic shocks—fuel hikes, currency swings, supply chain disruptions—can quickly erode profitability.

The Mareva injunction freezing Alerzo’s accounts represents more than a legal dispute; it highlights the tension between rapid venture-backed scaling and the realities of working-capital finance in emerging markets.

What Comes Next

The outcome of the court proceedings will determine whether Alerzo can restructure its obligations, secure new financing or face deeper operational constraints.

For investors and founders across Africa, the episode offers a cautionary signal. Capital-intensive models that thrived in a liquidity-rich environment must now demonstrate resilience under tighter financial conditions.

Alerzo’s leadership insists that operations continue and that the company remains committed to serving its retailer network. Yet the combination of frozen assets, mounting interest obligations and persistent macroeconomic headwinds underscores the fragility of even well-funded ventures.

As Africa’s startup ecosystem matures, the shift from growth to sustainability may prove decisive. The next phase will likely favor businesses with leaner cost structures, stronger balance sheets and clearer paths to profitability.

For now, Alerzo stands as a test case—of whether a once high-flying venture can navigate the harsh arithmetic of debt, discipline and a cooling capital market.

Source: The High Street Business