Kenyan agri-tech startup Twiga Foods raised $30 million from lenders and investors in a fund-raising round led by Goldman Sachs, to fund its expansion into West African countries.
Launched in 2014, Twiga’s mobile platform links retailers with farmers and food manufacturers, to make food cheaper and more accessible to a continent with a growing population and food crisis.
The round raised $23.75m in equity from Goldman Sachs and existing VC investors the international Finance Corporation (IFC), TLcom Capital, Wamda Capital and Creadev, as well as $6m in debt from OPIC and Alpha Mundi, an announcement on Monday said.
The money raised will be used to fund the firm’s expansion into other Kenyan cities, as well as mainly French-speaking West Africa, Twiga’s co-founder and CEO Peter Njonjo told African Business.
Outlining the target countries, Njojo said: “1st place is Cote d’Ivoire, then Mali and Burkina then Togo, Dakar, and Nigeria.”
“Twiga will announce the countries and timeline within the next year,” he added.
The company also plans to roll-out a new distribution centre in Nairobi by March 2020, he revealed.
“The new distribution centre will have ‘state of the art’ cold rooms, conveyor and sorting equipment, which will enable Twiga to offer supply chain services for both fresh produce and FMCG products.
The company also hopes to branch out in Kenya to Mombasa, and possibly Nakuru, within the next year, he explained.
The latest round of funding will also be invested in technology to solve inefficiencies in Africa’s domestic food market, worth $300bn and expected to grow to $1trn by 2030, Njonjo said.
The B2B distribution company has a team of drivers who deliver fresh produce and processed food including rice, maize flour, cooking oil, milk, juice, sugar and snacks within 18 hours of an order being made on its platform. It pays farmers registered on the app within 48 hours using local mobile money systems such as M-Pesa.
With Africa’s population set to double over the next 30 years, access to reliable and affordable food sources for consumers and guaranteed markets for farmers are crucial for solving regional food insecurity, Secretary of Kenya’s Department for Crop Development and Agricultural Research Prof. Hamadi Boga said.
“Food security is a key priority for the Kenyan government and Twiga Foods is playing a major role in achieving this. As our population grows and urbanisation continues, it is essential that we can provide access to affordable food for as many Kenyans as possible, as well as support and promote sustainable agriculture. We commend them on their impact so far, as well as their ability to attract investment to Kenya.”