To expand across Africa, Kenya’s Twiga raised $50 M in Series C funding round

Twiga, a Kenyan B2B e-commerce platform, has acquired $50 million in Series C investment to expand its cheap food solutions across Africa.

Twiga is a B2B food distribution startup founded in 2014 that uses openness, efficiency, and technology to create fair and trustworthy marketplaces for agricultural farmers and merchants.

The company runs a B2B e-commerce system to streamline the supply chain between fresh food growers, FMCG manufacturers, and retailers. This eliminates the need for many intermediaries, cutting food costs for consumers dramatically.

Twiga is one of the continent’s best-funded digital firms, having raised $10 million in a Series A round in 2017, $10 million in November 2018, US $34.75 million in two rounds in 2019 (see here and here), and $29.4 million in debt capital from the International Finance Corporation (IFC) last year.

Creadev, a French investment firm, sponsored a $50 million Series C financing for the company. Juven, TLcom Capital, IFC Ventures, and DOB Equity all made large follow-on investments in the round, while OP Finnfund Global Impact Fund I and Endeavor Catalyst Fund joined as new investors.

A US $30 million secondary offer provided liquidity to select early investors, delivering up to a 100% annualised return.

Twiga intends to expand its service to the remainder of East Africa in the following months, and then to West Africa in 2022. It’s also allocating some of the funds to a proof-of-concept project to cultivate its own fresh food, utilising precision agriculture and satellite imaging to boost crop yields, with hopes to start selling the local horticulture commodities across East Africa in February 2022.

Twiga is serving as the off-taker of the produce, and the company is working with development financing partners to figure out how to replicate this concept as a distinct business across Africa. By the end of 2021, a portion of the investment will be used to assist the deployment of low-cost, high-quality manufactured food and non-food goods under the Twiga brand.

Twiga’s potential to revolutionise informal shopping across Sub-Saharan Africa, according to Creadev’s Africa director Pierre Fauvet, is “very persuaded.”

“Tapping into a US$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 said.

“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.”