Kenyan B2B e-commerce platform Twiga has raised a US$50 million Series C funding round to help it scale its affordable food solutions across Africa.
Founded in 2014, Twiga is a B2B food distribution company that builds fair and reliable markets for agricultural producers and retailers through transparency, efficiency and technology.
The startup operates a B2B e-commerce system to simplify the supply chain between fresh food producers, FMCG manufacturers and retailers, that removes the need for many intermediaries, significantly lowering the cost of food for consumers.
Twiga is one of the best-funded tech startups on the continent, securing a US$10.3 million Series A funding round in 2017, a further US$10 million in November 2018, US$34.75 million across two rounds in 2019 (see here and here), and US$29.4 million in debt funding from the International Finance Corporation (IFC) last year.
It has now banked a US$50 million Series C round, led by Creadev, the French investment company. The round also includes significant follow-on investment from tech-oriented shareholders Juven, TLcom Capital, IFC Ventures and DOB Equity, while OP Finnfund Global Impact Fund I and Endeavor Catalyst Fund participated as new investors.
The transaction was also the opportunity for certain early investors to access liquidity via a US$30 million secondary sale, generating up to a 100 per cent annualised return.
Twiga plans to expand its offering to the rest of East Africa in the coming months and West Africa in 2022. It is also deploying part of the funding towards a proof of concept to develop its own fresh produce, using precision agriculture and satellite imagery to drive up crop yields, and plans to start selling the domestic horticultural crops from February 2022 across East Africa.
The company is working with development finance partners to find ways to scale this model as a separate business across Africa, with Twiga acting as off-taker of the produce. Part of the funding will also support the rollout of low-cost high quality manufactured food and non-food products under the Twiga brand by the end of 2021.
“Africa has a big problem with affordable access to food. At the heart of this is how fragmented African retail is. Twiga is fixing this problem, using technology to build the most extensive and lowest cost distribution network in Kenya,” said Peter Njonjo, chief executive officer (CEO) and co-founder of Twiga.
“This is the template we will roll out to other African markets, adapted to the local environment. Our vision is to become the one stop shop solution for informal retail in the markets we operate.”
Pierre Fauvet, Africa director at Creadev, said he was “deeply convinced” in Twiga’s potential to revolutionise informal retail across Sub-Saharan Africa.
“Tapping into a US$77 billion urban market on the continent, Twiga has gained significant traction since inception, leveraging on technology to optimise the food supply chain in African cities and constantly innovating to better tackle logistics, commercial, social and environmental challenges,” he said.