Twiga Foods, the Kenyan food distribution company, has raised $23.75 million (Ksh2.4 billion) from international investors.
The equity funding is led by Goldman Sachs, with participation from existing investors including the International Finance Corporation, TLcom Capital and Creadev.
An additional $6 million (Ksh600 million) in debt was raised from OPIC and Alpha Mundi, bringing the total to Ksh3 billion.
“This funding enables us to invest in our technology and organization to tackle the inefficiencies in Africa’s domestic food production and distribution ecosystems,” says Mr Peter Njonjo, CEO and Co-founder of Twiga Foods.
He said the informal and fragmented market that is estimated at $300 billion and seen grow to $1 trillion 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.”
Since its launch in Nairobi in 2014, Twiga has been building an end-to-end distribution network for fresh and processed food, sourcing from more than 17,000 producers. It delivers three times a week on average to over 8,000 retailers.
Twiga’s digital platform and logistics network links retailers with farmers and food manufacturers, presenting a convenient alternative to the farm/factory-to-market processes.
The money raised will fund the continued development of Twiga’s proprietary technology and logistics assets to support the roll-out of its distribution system and expansion into other cities on the continent.
Twiga’s mobile-based, cashless platform aggregates urban retail demand, offering thousands of small and medium-sized vendors consolidated ordering. Retailers have access to lower-cost, higher-quality fresh produce and processed food, delivered within 18 hours.
Twiga pays farmers within 48 hours of collection with mobile money.
Tech-led distribution
Twiga covers a range of fresh produce and a growing share of the overall shopping cart. Its fresh offering includes bananas, potatoes, onions, tomatoes and watermelons – popular staples in Kenya.
More recently, leading Kenyan manufacturers have tapped into Twiga’s technology-led distribution network, with the company now distributing a fast-growing range of processed food including rice, maize flour, cooking oil, milk, juice, sugar and snacks.
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Twiga is also tackling 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.
Jules Frebault of Goldman Sachs said Twiga’s innovative model combines technology and modern logistics tailored to the local market to re-engineer the food supply chain.
Access to affordable food
With Sub-Saharan Africa’s population set to double over the next 30 years, access to reliable and affordable food sources for consumers and guaranteed markets for farmers are essential for effective food distribution.
“Food security is a key priority for the Kenyan government and Twiga Foods is playing a major role in achieving this,” said Prof. Hamadi Boga Principal Secretary of the Kenya State Department for Crop Development and Agricultural Research.
“ As our population grows and urbanization 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.”
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