Orda, a Nigerian food tech platform that offers a cloud-based restaurant operating system to help small, independent eateries overcome these problems, has announced a $3.4 million seed investment. This January, the two-year-old startup raised $1.1 million in pre-seed capital, bringing its total funding this year to $4.5 million.
Quona Capital, an emerging market investor, co-led the round with New York-based FinTech Collective. Existing investors such as LoftyInc Capital, Enza Capital, and the Norrsken Foundation, as well as new venture capital firms such as Outside VC and Far Out Ventures, are among the others.
One of the food tech’s goals with this fresh investment is to build and scale its payments capability. Others include growing its restaurant network and pursuing pan-African expansion (into South Africa and much later, Ivory Coast). It has strengthened its leadership team in this regard, bringing in Afua Ahwoi, head of operations and strategy (ex-Goldman Sachs), and Modesola Osasomi, head of growth (ex-Barclays Bank), for its next phase of growth.
Why The Investors Invested
Since its inception, the firm has gained significant traction. Futi claims that Orda has seen tremendous adoption among small restaurants in its two markets, Nigeria and Kenya, and that the startup has already achieved product-market fit. His conviction stems from the number of vendors it has attracted, approximately 600, and the speed with which the food tech has onboarded them, in less than a year.
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Orda expects to service more than 1,000 eateries by the end of Q1 2022, according to the CEO, and there are “hundreds more” in the pipeline. Orda’s trades have increased as well. It now processes over 50,000 orders every week for its vendors, which is five times what it did in January, with its gross merchandise value (GMV) increasing by 30% month on month. “We’re witnessing rapid growth in Nigeria and Kenya, with retention rates above 95%,” Futi said.
“When a restaurant owner moves from pen and paper to a fully automated digital platform, it’s incredibly empowering. Suddenly they have insights available to them that can improve their productivity and margins, enabling them to grow their businesses. A solution like Orda can have an outsized impact on small and medium-sized restaurants and the livelihoods of those who operate them,” Kofoworola Agbaje, senior investment associate at Quona Capital said.
A Look At What The Startup Does
Founded in 2020, Orda’s clients are mostly small and medium-sized restaurants. With limited access to technology, these restaurants typically resort to using offline methods, including pen and paper, for things like manual reconciliation and inventory management. Orda’s operating system allows these businesses to handle these parts of their business online, as well as get access to other features, including kitchen display systems, accounting software and integrations with food aggregators such as YC-backed Chowdeck, Bolt Food and Glovo.
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“We take an interesting approach to software and helping restaurant owners set up,” chief executive officer Guy Futi said. “Our software digitizes the process of those who write things in hand and helps them figure out their inventory management and recipe yields.”
Orda’s pricing model allows restaurants to choose between three payment plans: N1,000 ($1.54), N5,000 ($7.69), and N20,000 ($30.76) to gain access to various parts of the software, such as order management and an omnichannel, as well as integrations with food aggregators and delivery platforms and setup personnel. According to Futi, revenue has surged as a result, increasing 30% month on month.
Despite this expansion, developing solutions for these African eateries has been fraught with difficulties, particularly given the absence of a playbook. Orda, for example, has had to configure its cloud-based solution to work offline and allow restaurants to continue logging data when internet access is limited.
Meanwhile, Orda plans to expand the platform’s functionality, notably around financial items, as it seeks to enable lending and payments for its consumers. According to Futi, the platform already processes payments for 10% of its vendors and may begin a big rollout in Q2 of next year.
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When asked if Orda plans to expand into these other categories, Futi said that such a business decision would be unwise because it would divert the startup’s focus away from software development.
“Globally, you see that Sysco isn’t in the same vertical as Toast,” said the founder who launched the startup with Fikayo Akinwale, Mark Edomwande, Kunle Ogungbamila and Namir El-Khouri. “If there’s some sort of collaboration with other players, we’ll be open to that. But from our position, building the right software takes you deep down the rabbit hole and that requires focus.”
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh