June 6, 2019

by Lynda Kiernan

The IFC, a member of the World Bank Group,  and TLcom, an Africa-focused venture capital firm, have co-led a $10 million funding round for Twiga, a Kenyan agtech startup that uses mobile phone technology to align supply and demand in Africa’s large, but fragmented fruit and vegetable market.

Other participating investors include those previously involved: Wamda Capital, DOB Equity, 1776, and AHL Venture Partners.

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.

“The main reason markets do not work here is because there lacks a proper market infrastructure to support the 5 million population in Nairobi,” said Brookein 2017. “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.”

Twiga’s food tech platform employs mobile technology to align supply and demand, acting as a B2B facilitator, aggregating buyers and growers in Africa’s highly disordered fruit and vegetable market. Twiga operates collection centers across Kenya, as well as cold storage facilities, a central pack house, and mobilized trucks and vans. Through Twiga, vendors can use the company’s m-commerce platform to order produce as and when needed, which is then delivered to their doorstep free of charge by the company. Farmers are then paid within 24 hours.

In essence, 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.  It’s a win for all sides – farmers have guaranteed access to a fairly-prices, transparent marketplace, and vendors can consistently source high-quality produce which is delivered by Twiga.

This system not only increases efficiency, but also food safety, and reduces food waste, lowering post-harvest loss from 30 percent at informal markets to just 5 percent.

More than 91 million people get sick, and 100,000 deaths occur from micro-biological causes linked to animal products, fruits, and vegetables, according to Jumoke Jagun Dokunmu, regional director for Eastern Africa, IFC. The partnership between IFC and Twiga will support farmers by improving food safety, and environmental and social practices, which will provide consumers with higher-quality, safer foods.

Since its launch, Twiga has grown to work with 13,000 farmers and 6,000 vendors in Kenya. Beginning with matching vendors to banana farmers, the company now works with a range of produce including tomatoes, cabbage, mango, potatoes, and onions.

“Twiga is proving that smart use of technology and innovative business models can vastly improve large and inefficient African markets such as the agricultural supply chain. With capital and business building support coming from this set of investors, Twiga is positioning for massive value generation, demonstrating the increasing maturity of the Africa venture capital space,” said Maurizio Caio from TLcom.

Twiga plans to use this latest funding to expand its operations and to include new services. Along with its capital investment, IFC’s Advisory Services team will also work with Twiga to coach farmers through a project starting with 30 farms pilot farms across 20 countries to achieve GLOBAL GAP certification, a standard for sustainable and safe agricultural practices, and also will work with the company’s farmers to improve soil health, output, and to increase access to financing – two steps working toward Twiga having a completely traceable and sustainable supply chain.

As part of the funding agreement, Wale Ayeni, who leads IFC’s venture capital activities in Africa, and Maurizio Caio, managing partner at TLcom, will also join Twiga’s board.

-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 lkiernan@globalaginvesting.com.