Apparently affected by the growing VC interest in startups during this coronavirus pandemic, Kenya’s fruits and vegetable delivery platform Twiga Foods has secured a loan of $5 million from the US International Development Finance Corporation (DFC).
Here Is All You Need To Know
- Twiga will use the amount to buy additional transportation and cold storage equipment to improve market supply. The company sources from more than 17,000 producers and delivers agricultural products to over 8,000 retailers per week.
- According to Peter Njonjo, co-founder of Twiga, the informal and fragmented market for food production and distribution in Africa was worth more than $300 billion in 2019.
- This is not the first loan granted by the American DFC. In October 2019, the development agency had co-invested alongside other investors in the capital of Twiga Foods.
Read also: Lessons Twiga Foods Has Taught Startups About Disrupting Africa’s Food Supply Chain
A Look At What The Startup Does
Twiga Foods is going after Kenya’s food sector to break the jinx of inefficiencies presently in the sector, and to ensure that the limited resources available in Kenya’s agricultural sector are well-utilised.
Its simple business model is to aggregate all food retailers and dealers, from the banana vendors buying in bulk to the avocado retailers selling in stock, and then connecting them to Kenyan farmers producing quality farm produce. This is a classic example of a business-to-business (B2B) model, so that vendors looking to purchase agricultural produce don’t have to travel miles to meet local producers of the produce, thereby saving them the transportation and logistics cost, increasing the productivity and demand for the produce of the farmers, at the same time reducing food waste.
These metrics are what TLCom Capital looked out for when it invested in Twiga Foods.
“TLcom’s general investment thesis for Africa is that given the high penetration of mobile, there are very large markets where demand is already proven and technology can play a true role in offering a superior value proposition over existing solutions,” said Ido Sum, partner at TLCom Capital which syndicated Twiga Foods’ recent $30 million fund raising led by Goldman Sachs.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com