Vendease, an online marketplace that enables restaurants and other food businesses to buy goods directly from manufacturers and farms, has secured $3.2 million in a seed round.
Global Founders Capital, a venture capital firm based in San Francisco, led the seed round. Individual local investors and early backers like as Paga CEO Tayo Oviosu, Remita CEO John Obaro, and Magic Fund participated, as did Y Combinator, Hustle Fund, Liquid 2 Ventures, Hack VC, and Soma Capital.
The announcement comes seven months after the startup which was launched in January 2020, was selected for Y Combinator’s winter batch, which also includes nine other African startups.
The startup will use the money to extend the company into other cities and countries before the end of the first quarter of next year. Vendease will also be able to continue to develop its technological stack, as well as acquire relationships with payment platforms and banks to expand its financial solutions, including buy now, pay later.
Why The Investors Invested
Last month, the YC-backed startup surpassed $12.9 million in annualized transaction volume and $1.2 million in annual recurring income. While co-founder Tunde Kara did not provide revenue figures, he did say that Vendease’s revenue had increased 17 times since last year.
Over 1,000 businesses have accessed more than $3 million in supply chain finance using the platform thus far.
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Kara also claims that the firms on Vendease have saved almost 5,000 person-hours in terms of human resources. According to him, Vendease has transported 100,000 metric tonnes of food. Moving that much food in just over eighteen months is an impressive achievement for a company.
In a statement, the managing partner at Global Founders Capital said, “As a backer of one of Africa’s very first unicorns, Jumia, we’ve seen a great deal of talent in the market — and Tunde & the Vendease team are best in class both in EMEA and globally. Their laser focus and rapid growth are unprecedented, and there’s a massive opportunity ahead.”
Vendease also claims to be different from competitors because of its execution and operational industry knowledge, as well as data on food businesses, which Kara believes will give the company an advantage over other platforms.
A Look At What The Startup Does
Founded in January 2020 by Tunde Kara, Olumide Fayankin, Gatumi Aliyu, and Wale Oyepeju Olumide Fayankin, Gatumi Aliyu and Wale Oyepeju, Vandease is trying to solve the challenges and inefficiencies in Africa’s highly fragmented food sector, starting with Nigeria.
The business is a decentralized marketplace that connects suppliers and farms with restaurants and food businesses on one side and restaurants and food businesses on the other. When a restaurant or food business puts an order, the system generates a list of all available suppliers who can fill it, compares pricing and quality, and allocates the order to the provider with the best pricing and quality. Delivery is made within 24 hours, according to the company, either by itself or by third-party logistics suppliers.
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Vendease has also developed a series of stacks — logistics, storage, payments, inventory management, and embedded finance — to govern the movement of food supplies from one point of production to the endpoint of consumption, according to co-founder and CEO Kara.
Vendease now has locations in three Nigerian cities: Lagos, Abuja, and Ibadan, and works with some of the country’s most well-known food companies, including Hard Rock, Krispy Kreme, and Shiro.
Vendease marketplace Vendease marketplace
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