Food Distribution B2B Platform, Twiga Foods, raises $50 Million in Series C Funding
Kenya-based food distribution startup, Twiga Foods, raises $50 million in Series C funding round led by Creadev.
Twiga Foods is a Kenya-based startup founded in 2014. It provides a B2B food distribution platform, that is empowered with the technology. Because of the weak retail infrastructure and food distribution problems in Kenya, the startup has secured $50 million in a Series C funding round to scale food solutions across Africa.
Africa-focused firms TLcom, IFC Ventures, DOB Equity, and Goldman Sachs’ spinoff Juven, wrote follow-on checks too. First-time investors OP Finnfund Global and Endeavor Catalyst Fund participated as well.
Years ago, when America was not as developed as it is now, the countrymen used to spend most of their disposable income on food. However, the percentage has declined over time. The more a country is developed, the smaller the percentage of household income it spends on food. Since Africa is an underdeveloped region in the world, it is still battling with the same problem.
Because of very small technological development, the retail market is very non-transparent. The abundance of informal retailers and intermediaries leads to loopholes. This is the reason that a ton of tomatoes in Africa is 400% expensive than in America.
To counter the problem and provide digitally enabled quick solutions, Twiga connected vendors and outlets with farmers in beginning. However, in 2019 Twiga tried to increase revenue by connecting FMCGs and manufacturers with retailers. Thereby dipping its hands into a space with regional players such as Sokowatch and MarketForce
Twiga claims that it has more than 100,000 customers across Kenya and it is delivering more than 600 metric ton products to 10,000 customers daily.
“We see ourselves as building a one-stop-shop for the informal retailer and all their needs. So that’s what we’re evolving into as a business,” CEO Peter Njonjo said.
It is also important to note that the company also raised $30 million in 2019 in Series B funding. Including the current funding, Twigo has raised over $100 million in total.
There are some challenges that the company has encountered in recent times which include traceability problems for some products. Moreover, it also includes the safety problems and the use of pesticides by the farmers. To counter these problems, Twiga plans to manage the value chain of some produces on its own.
The company is focussing on a proof of concept model to reduce prices the consumers pay. It will focus on developing alternative ways of producing popular food items for this purpose. The company aims to use the funds to test this concept and increase the scalability of food solutions.
The popularity of e-commerce platforms has reached its zenith nowadays. B2B distribution platforms like Twigo, undergone some problems during COVID-19. However, the demand for the development of eCommerce platforms increased manifold as people were unable to move freely. The food market of Africa has a potential of $1 trillion. Moreover, the food market of different South Asian countries has great potential. This potential can be very beneficial with the help of digital solutions. The incorporation of eCommerce has become a guaranteed success. That’s why platforms like Facebook, Instagram, and Tik Tok have also introduced such tools as to promote and enter eCommerce market.