TWIGA FOODS RAISES $30M LED BY AMERICAN GOLDMAN SACHS
Nairobi-based startup ‘Twiga Foods Raises $30M’ led by top American investment bank ‘Goldman Sachs’, which will see the American bank provide funds with other existing investors – International Finance Corporation (IFC), French Private Equity Fund Creadev, and TLCom Capital. However, the funding is aimed at curbing the high rate of waste and poor distribution of agricultural produce across African countries.
The fund raised, which is also classified as Series B round will be used by the company to fund its distribution center in Kenya’s capital Nairobi, and deepen conversion of the company’s supply chain services.
Prior to this development, its understood Twiga Foods operates a two-fold business-to-business model that enables it to connect demand to supply, which allows retailers to order fresh agricultural produce from local farmers through the startup mobile platform. According to a farmer, all you need is to be on their platform, contact Twiga as you harvest the farm produce and they will buy and pay you instantly via mobile transfer, and Twiga will supply direct to retailers.
The process of managing supply through its logistics arm, will go a long way reducing waste and improve efficiency. At the moment, the company distributes food to over 8,000 retailers across Kenya. And plan to expand into more cities in Kenya while targeting Pan-African expansion by the third quarter of 2020.
Responding to this development, the CEO ‘Peter Njonjo’ said the latest funding will allow it start “building a foundation” for its next year’s international expansion plan, starting with French-speaking countries in West African. However, Twiga’s CEO is aiming at a big-picture, which implies expanding into Africa’s most populous country and largest economy – Nigeria.
It’s also understood, Nigeria is currently faced with inefficient farming practices, with Twiga Foods raising $30M and establishing its presence in Nigeria will see the startup join the local agribusiness startup currently offering farmers with tech-based solutions. Njonjo also added,
“Essentially the problem we are trying to solve is reducing how much it costs for the average African to spend on food. Soon, food security will not be about the availability of food but will be about the cost of food in our cities”.
On the other hand, Njonjo made it clear that Twiga Foods has reduced typical post-harvest losses in Kenya from 30 percent (30%) to 4 percent (4%) for agricultural produce brought to market via the company’s network.
Though, there is concern over the company’s dependent on orders placed by informal retailers who in most cases lack cash-flow to replenish their stock, while on the other hand still struggle to secure a loan based on lack of credit history. This Njonjo says Twiga will now leverage the data it has collected on retailers to curate their creditworthiness, and in the process provide them with working capital.
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