Kenya’s agritech startup, Twiga, announced today that it has raised $50 million in a Series C round to scale its efforts in Kenya, and other surrounding countries. The funding follows a $30 million Series B round — $23.75 million equity and $6.25 million debt — raised in 2019, and brings Twiga total raise in both debt and equity financing rounds to over $100 million, per Crunchbase.
Private equity firm Creadev led the funding round, with participation from pan-Africa firms TLcom Capital, IFC Ventures, DOB Equity, and Goldman Sachs’ spinoff Juven. The round also saw the participation of first-time investors OP Finnfund Global and Endeavor Catalyst Fund.
Launched in 2014, Twiga has used technology to build supply chains in food and retail distribution. In Africa today, poor retail infrastructure remains a challenge. The continent’s retail markets are highly fragmented and mostly made up of small and local retailers and intermediaries. With its technology, Twiga simplifies the supply chain between fresh food producers, fast-moving consumer goods manufacturers and retailers through a business-to-business e-commerce platform. This removes the need for many intermediaries, thereby reducing the cost of food for consumers.
Twiga initially linked vendors and outlets with farmers through an app to access different agricultural produce. But in 2019, the startup began to connect fast-moving consumer goods manufacturers with retailers in Kenya in a bid to increase revenue, venturing into space with regional players such as Sokowatch and MarketForce. Twiga claims that there are over 100,000 customers using its services across Kenya while delivering more than 600 metric tons of product to more than 10,000 retailers daily.
Commenting on the investment, Pierre Fauvet, Creadev’s Africa Director said that his company had great confidence in Twiga’s potential to revolutionize informal retail across Sub-Saharan Africa. “Tapping into a $77 billion urban market on the continent, Twiga has gained significant traction since inception, leveraging on technology to optimize the food supply chain in African cities and constantly innovating to better tackle logistics, commercial, social and environmental challenges,” he remarked.
The new funds will be targeted at products and geographical expansion. Per product expansion, Twiga is investing in a proof of concept to develop an alternative way of producing food in Africa. According to the company, the proof of concept aims to reduce the price consumers pay for popular domestic plant-based food products by over 30 percent. Twiga also plans to roll out low-cost manufactured food and non-food products under its brand before the end of the year.
Per geographical expansion, the startup plans to expand to other East African markets like Uganda and Tanzania, before the end of the year. “We’ve been fairly successful in Kenya. So, we want to consolidate our dominant position, clear out our proof of concept and expand to neighbouring countries,” said Twiga’s Chief Executive Officer, Peter Njonjo.
Achieving these plans will position Twiga for a larger fundraise sometime next year, according to Njonjo, after which it will start eyeing other markets, including Côte d’Ivoire, Congo, Ghana and Nigeria. Njonjo added that Twiga’s expansion into Nigeria might involve some mergers and acquisitions.