Kenya’s food solution startup Twiga has announced a $50 million Series C round. The new funding is to expand its operations in the East African country and neighbouring countries.
Founded in 2014 by Peter Njonjo, Twiga Foods leverages technology to develop supply chains in food and retail distribution in Kenya and across Africa.
The startup was launched to provide food solutions arising from the fragmented retail markets in Africa. A challenge that was broadened by the informal approach of retailers and middlemen in the industry. This explains why a ton of tomatoes costs roughly $100 in the United States, but in Kenya, it costs $400.
The Operational History of Kenya’s Food Solution Startup Twiga
The Kenyan food solution startup Twiga’s funding of $50 million, follows the company’s $30 million Series B round in 2019. This includes $23.75 million in equity and $6.25 million in debt. Twiga has raised approximately $100 million in loan and equity investment rounds.
Twiga used to connect retailers and outlets with farmers via an app to get various agricultural products. However, in order to grow revenue, the company began connecting Fast Moving Consumer Goods (FMCGs) and manufacturers with Kenyan retailers in 2019. This action put it in competition with regional rivals such as Sokowatch and MarketForce.
“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.
The B2B e-commerce food distribution platform claims that over 100,000 customers use its services across Kenya. At the same time, the platform delivers over 600 metric tons of product to 10,000+ retailers daily.
“For us, it’s choosing value chains where you can manage the traceability issue while there are some value chains that will be harder to manage,” the CEO said.
“The key thing is that we now have a more blended approach. It’s not just about working with small farmers; we still work with them but on some value chains. But we’re looking at having large commercial farms integrated into our supply chain.”
Twiga’s Prospects in Africa
The Kenyan food solution startup Twiga is currently working with development finance partners to figure out how to scale its proof of concept. This is for the platform to act as a pioneer to sell horticultural crops from February 2022 across East Africa.
“We’ve been fairly successful in Kenya. So, we want to consolidate our dominant position, clear out our proof of concept and expand to the neighbouring countries,” remarked Njonjo, who founded the company with Grante Brooke, Twiga’s ex-CEO.
Hitting these targets would set Twiga up for a bigger fundraise sometime next year, according to Njonjo. After that, Twiga will look at other markets like Cote d’Ivoire, DRC Congo, Ghana and Nigeria. Njonjo adds that Twiga’s expansion into Nigeria might involve some mergers & acquisitions.
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