Vendease, a Nigerian food procurement startup, has raised $30 million in Series A funding (split between $20 million in equity and $1 million in debt). The company shifted its business model from acting as a middleman to buying discounted products in bulk, storing them, and delivering them via third-party logistics partners after noticing that some of its clients were unhappy with delivery times, quality of food supplies, and inadequate infrastructure to manage operations.

TLcom Capital and Partech Africa spearheaded the investment. Existing investors in the round include VentureSouq, Hustle Fund, Hack VC, GFR Fund, Kube VC, Magic Fund, and Kairos Angels (the company raised debt from the local debt market, according to a statement from the company).

“Something important to us about our current growth and impact is despite the ongoing global food supply shortage and inflation, Vendease is helping our users save big and provide relative stability for their stock levels. Shielding them (to a large extent) from the most severe effects of the current global shortage,” said CEO CEO Tunde Kara. “What excites us is we can have even more impact as we extend and entrench our technology within Africa and the rest of the world. And that’s what keeps us going.”

Vendease intends to utilise the investment to grow its operations, solidify its position in eight cities throughout Nigeria and Ghana (the firm recently expanded to the latter), enter new markets, and develop new products to boost consumer efficiency, according to Kara.

Last October, the YC-backed food procurement platform secured a $3.2 million seed round.

Why The Investors Invested

The startup has gained a lot of traction. Over the previous year, the platform claims to have transported roughly 400,000 metric tonnes of food for its over 2,000 customers, saving them approximately $2 million in procurement expenditures and over 10,000 person-hours.

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Investors were also seemingly excited by the major pivots the company has implemented after its last funding. While Vendease uses data to distribute working capital through its BNPL product, the firm’s approach has shifted from what it used to be: instead of utilising its own books, the company now collaborates with banks and financial institutions to provide finance through its platform. So far, firms have used the embedded financing product to access more than $12 million in inventory. Its income, which the firm claims has increased 5x in the last year, comes from supplier arrangements; it has yet to monetize its loan operation.

According to a statement released by Vendease, Andreata Muforo, a partner at TLcom Capital, and Cyril Collon, general partner at Partech Africa, are backing Vendease because they believe it can unlock significant value in Africa’s fragmented food supply chain and deliver robust solutions that impact critical issues surrounding the continent’s food system.

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The involvement of lead investors in this round, TLcom Capital and Partech Africa (both of which own substantial pan-African funds) as well as their being of the company’s board according to the CEO implies his business has backers “willing to go the long haul.”

A Look At What The Startup Does

Vendease was founded by Olumide Fayankin, Gatumi Aliyu, Wale Oyepeju, and Tunde Kara in January 2020 to solve challenges and inefficiencies in Nigeria’s highly fragmented food sector. Its marketplace model connects suppliers and farms to restaurants and food businesses, with deliveries made within 24 hours.

Vendease helps African restaurants and food businesses acquire supplies, access banking services, and operate. Vendease works hard to improve supply chain efficiency. According to the company, most consumers, including restaurants, hospitals, hotels, and schools, lose $100 billion annually. Unreliable supply and waste, little data for educated procurement decisions, and little or no procurement funding are all issues. Its stack-based platform helps food businesses avoid these losses and grow.

“We’re building technology to efficiently move food from the point of production to the point of consumption,” Kara said, about Vandease’s mission. “Everything we build at Vendease: financing, logistics, warehousing, inventory management, is tailored towards ensuring that food flows efficiently from that point of production to the point of consumption.”

Vendease has saved clients $500,000 in overstocking waste. The CEO credited this accomplishment to completely using firms’ data and providing them with inventory management resources at every step of their journey, including delivery routes. Vendease’s delivery time is now 12 hours.

“Since businesses don’t have access to accurate data, they usually buy what they dont need. We help them to solve that problem in two ways,” Kara commented on the company’s progress. “One, because businesses know they can get anything on our platform in 12 hours, they don’t need to stock some of the things they would’ve stored before. Two, they can also track what they bought and know how much is left before they need to buy again.”

Vendease views itself as a plug-and-play solution for yet-to-be-launched African restaurants and food enterprises in three to five years.

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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://insightsbyexpert

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