Kenyan tech firm Twiga, one of Africa’s fastest-growing start-ups, has raised $50m to help expand across Africa. Twiga’s technology massively simplifies the food supply chain, making food more affordable.
B2B e-commerce platform Twiga raises $50m to scale affordable food solutions across Africa
French investment company Creadev, with increasing African presence, leads a $50m primary Series C round and $30m secondary
Twiga helps lower the cost of food for consumers, modernizes the entire supply chain and helps vendors raise their profit margins
Affordability of food is a big problem in Africa – Africans can spend up to ten times more of their disposable income on food compared to people in more developed markets
Twiga quadrupled its revenue during the COVID pandemic
Twiga plans to expand its offering to East Africa in the coming months and West Africa in 2022
Twiga, the Kenyan headquartered B2B e-commerce food distribution platform, has successfully closed its Series C funding round, raising $50m of fresh capital to further its expansion plans.
Twiga operates a B2B e-commerce system to simplify the supply chain between fresh food producers, FMCG manufacturers and retailers. This removes the need for many intermediaries, significantly lowering the cost of food for consumers.
Twiga employs over 1,000 people and has over 100,000 registered customers for its services across Kenyan cities, delivering over 600 metric tons of product to over 10,000 retailers daily.
The company has shown great resilience and momentum, quadrupling its revenue during the COVID pandemic.
It plans to use the capital raised in its latest funding round to help expand its offering to East Africa in the coming months and West Africa in 2022.
Using tech to modernize informal retail
Twiga’s technology is at the heart of the solution to Africa’s lack of affordable access to food. It’s estimated that Africans spend up to ten times more of their disposable income on food compared to developed markets.
This is a problem primarily driven by a highly fragmented and inefficient retail market across the continent, where around 90% of the retail industry consists of small, informal independent retailers.
About 150 years ago, consumers in the USA were spending a similarly exorbitant amount of their disposable income on food as compared to Africa today, but, years of private sector-led investment in retail infrastructure has built an efficient supply chain.
Today, the spend on food and beverage in the US is only 6% of disposable income. Twiga gives the example of a ton of tomatoes in the US costing around $100. Due to intermediaries and inefficient production, in Kenya the cost is $420.
Twiga is building an alternative system that aims to generate the same results as the modernization of retail in the more developed markets, by leveraging technology and the ubiquity of mobile phones, combined with modern distribution and logistics to aggregate consumer demand and start building more efficient supply chains.
Its Series C funding round was led by Creadev, with significant follow-on investment from tech-oriented shareholders Juven, TLcom, IFC Ventures and DOB Equity.
New investors Endeavor Catalyst Fund, a co-investment vehicle designed to support Endeavor Entrepreneurs, and Finnfund, the Finnish development finance institution also participated.
Twiga has also raised $30m in a secondary transaction, where certain early investors accessed liquidity with up to a 100% annualized return.
High tech agriculture and satellites to boost crop yields
Twiga is deploying part of the funding from the Series C round toward a proof of concept to develop its own fresh produce, using precision agriculture and satellite imagery to drive up crop yields. It aims to reduce the price consumers pay for leading domestic plant-based food products by over 30%. * It plans to start selling the domestic horticultural crops from February 2022 across East Africa.
Twiga is working with development finance partners to find ways to scale this model as a separate business across Africa, with Twiga acting as off-taker of the produce. Part of the funding will also support the rollout of low-cost high quality manufactured food and non-food products under the Twiga brand by the end of 2021.
Expanding across the continent
Extreme fragmentation and inefficiencies in the food supply chain is a systematic issue throughout Sub-Saharan Africa.
Peter Njonjo, CEO and Co-Founder of Twiga, says: “Africa has a big problem with affordable access to food. At the heart of this is how fragmented African retail is.”
“Twiga is fixing this problem, using technology to build the most extensive and lowest cost distribution network in Kenya.
“This is the template we will roll out to other African markets, adapted to the local environment. Our vision is to become the one stop shop solution for informal retail in the markets we operate.”
Twiga has also raised $30m in a secondary transaction, where certain early investors accessed liquidity with up to a 100% annualized return.
Its Series C funding round was led by Creadev, with significant follow-on investment from tech-oriented shareholders Juven, TLcom, IFC Ventures and DOB Equity.
New investors Endeavor Catalyst Fund, a co-investment vehicle designed to support Endeavor Entrepreneurs, and Finnfund, the Finnish development finance institution also participated.
“We are deeply convinced in Twiga’s potential to revolutionize informal retail across Sub-Saharan Africa”, says Pierre Fauvet, Africa Director at Creadev.
Fauvet adds: “Tapping into a $77bn urban market on the continent, Twiga has gained significant traction since inception, leveraging on technology to optimize the food supply chain in African cities and constantly innovating to better tackle logistics, commercial, social & environmental challenges.”
Sarah Ngamau, Managing Director – Kenya adds, “Together with like-minded co-investors, we are thrilled to continue supporting Peter and his team as they scale access to high quality, affordable food for the many, and shape tomorrow’s world!”