Wamda Capital Leads $10.3M Series A for Kenya’s Twiga Foods
August 2, 2017
Wamda Capital has led a $10.3 million Series A for Kenya-based Twiga Foods – a disruptor of the food and ag supply chain that was launched with the goal of resolving the fragmentation in the produce market in order to generate value and returns for producers, vendors, and consumers.
Other investors in the round, which was comprised of $6.3 million in equity and $4 million in debt instruments, include Omidyar Network, DOB Equity, Uqalo, 1776, Blue Haven Initiative, Alpha Mundi, and AHL.
Co-founded in Nairobi in 2014 by Grant Brooke who ventured to Kenya in 2008 to conduct graduate work for his master’s degree, Twiga Foods was born from Brooke recognizing that the disorganized nature of the agriculture and food value chain was benefiting the brokers and not the farmers, and was blocking any attempts at solving issues in the market.
A surprising 96 percent of food and FMCG products in Kenya are sold at small- and medium-sized stalls which are supplied by large open air markets that are beyond capacity, reports QuickNews Africa. This system breeds inefficiency and leads to Kenyans having to spend 43 percent of their household income on food alone.
“Technology allowed us to create a replacement market for the wholesale market which is the Marikiti and Wakulima market and taking all this aggregated demand from our customers and organizing supply based on their needs,” Brook told Techweez during an interview in 2016.
Through this business structure, Twiga Foods became one of the largest banana buyers and suppliers, having sold more than 55 million bananas to date and delivering more than 4,000 orders per week.
“The main reason markets do not work here is because there lacks a proper market infrastructure to support the 5 million population in Nairobi. As a result, produce goes bad and there are massive delays at the markets. This means that the cost of the same gets passed to the customer,” said Brooke.
Twiga consolidates the supply chain, gathering the purchasing power of urban food retailers which enables higher quality, lower priced foods to be delivered directly to them, and eliminating the need for them to travel to the market.
“Twiga is a strong example of how to seize a huge opportunity-addressing both the inefficiencies in wholesale fresh fruit and vegetable markets and poor last mile solutions both for farmers and vendors -and how tech and data can help significantly improve living standards,” said Ory Okolloh, director of investments at Omidyar Network.
For Wamda, the investment in Twiga Foods gives the firm exposure in a new geography and opens a window for future growth.
“Twiga represents our first investment in East Africa, a new geography for us in which we plan on being increasingly more active,” said the chairman of Wamda Capital, Fadi Ghandour, who will be joining Twiga Foods’ Board of Directors. “We are particularly excited in beginning our investment programme in East Africa by supporting this remarkable set of entrepreneurs building a truly disruptive business.”
Ghandour went on to add, “Drawing on our experience in the logistics and supply chain space, we believe Twiga has developed a unique solution to address the inherent inefficiencies in the delivery of fresh produce in East Africa with significant positive impact for both producers and consumer.”
The capital from this round will be used by the company to diversify its portfolio of products, raise the number of vendors it can serve in Nairobi, and to begin to introduce advanced supplier services.
“Twiga is an outcome of the Nairobi start-up ecosystem, the years of investments that have gone into developing talent, supporting hubs, and attracting capital to the market,” said Grant Brooke, co-founder of Twiga Foods. “The team at Twiga and growth of the company are testaments to the fact that Kenya is on the cusp of solving huge global problems.”
In addition to the funds gained through the Series A, Twiga has also secured $2 million in grant funding from USAID, GSMA, and other institutions to fund the addition of bolt-on farmer services, financial inclusion, and to pioneer food safety programs in Kenya.
“The addition of new partners into Twiga, and continued support of our current stakeholders, is a huge affirmation that there’s a better way to build marketplaces for Kenya and the rest of urban Africa,” said Peter Njonjo, co-Founder, Twiga Foods “We can get consumers and suppliers a better deal, and this support will go a long way in achieving those goals.”
Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at email@example.com
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