Twiga Foods, a Kenyan food distribution company, has raised $23,75 million in venture capital funding. The Series B equity round is reported to have been led by Goldman Sachs, with participation from existing investors including the International Finance Corporation, TLcom Capital and Creadev.
This Series B funding round follows on from Twiga's Series A funding round earlier in 2019 where it reported that it raised $10 million.
“This funding enables us to invest in our technology and organization to tackle the inefficiencies in Africa’s domestic food production and distribution ecosystems; a $300bn informal and fragmented market that is estimated to grow to $1trn by 2030. With the support of our investors, we are developing technology-driven commercial solutions and cooperating with existing industry players to solve the challenge of food security in Africa," said Peter Njonjo, CEO and Co-founder at Twiga Foods.
Furthermore, an additional $6 million in debt was raised from OPIC and Alpha Mundi.
Digitizing food distribution
For 5 years running now, Twiga has been building an end-to-end distribution for fresh and processed food supply chain and channels in Kenya. The company sources the fresh produce it distributes from more than 17,000 producers around the East African country and delivers 3 times a week on average to over 8,000 retailers. A big part of Twiga’s operations is its digital platform and logistics network which links retailers with farmers and food manufacturers.
According to Twiga, the $23 million raised through its Series B funding round will help them with the continued development of their proprietary technology and logistics assets to support the roll-out of its distribution system and lay the foundations for expansion into other cities on the continent.
“Twiga’s innovative model combines technology and modern logistics tailored to the local market to re-engineer the food supply chain. We are delighted to be backing Peter and the highly capable team as they scale operations and drive sustainable access to lower cost quality food on the continent," said Jules Frebault of Goldman Sachs.
Tackling food supply chain inefficiencies
Twiga operates a mobile-based, cashless platform to aggregate urban retail demand, offering thousands of small and medium-sized vendors convenient one-stop shop ordering. Retailers have access to lower-cost, higher-quality fresh produce and processed food, conveniently and reliably delivered to their doorstep within 18 hours of ordering. As a result, farmers and food manufacturers have guaranteed access to a fairly priced, transparent marketplace. Twiga pays farmers within 48 hours of collection with mobile money, providing them with increased income visibility and permitting better financial planning.
The Kenyan company also tackles inefficiencies in the supply chain, helping to reduce food prices for consumers. Currently, between 30 and 50 percent of fresh produce is lost through poor post-harvest processes. Through investment in its supply chain and material handling, Twiga has reduced the level of food waste by up to 70% compared to the market averages.
“Food security is a key priority for the Kenyan government and Twiga Foods is playing a major role in achieving this. As our population grows and urbanisation continues, it is essential that we can provide access to affordable food for as many Kenyans as possible, as well as support and promote sustainable agriculture. We commend them on their impact so far, as well as their ability to attract investment to Kenya," said Prof. Hamadi Boga Principal Secretary of the Kenya State Department for Crop Development and Agricultural Research.Share this via: