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Kenya fresh produce platform aims to disrupt African retail

Kenya fresh produce app/Bloomberg

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Twiga Foods aggregates farm produce and distributes it to vendors at street corners or market stalls in Nairobi, through a mobile phone-based supply platform.

Sunday 14, April 2019

(Bloomberg) --Dar es Salaam, Lagos and Addis Ababa could be the next stop for a Kenyan fresh-produce distribution platform in its quest to disrupt food-supply chains in Africa.

In the country’s fragmented retail market, where 90 per cent of food is sold through informal outlets, the tech start-up is trying to create efficiency to lower food prices.

Peter Njonjo, Twiga’s Co-founder, said, “A banana in a Nairobi supermarket costs more than a banana in London, while the average income of a consumer in the UK is 30 times compared to Kenya, this is true for many African cities and our vision is to leverage technology and organise a more efficient value chain that lowers food prices.’’

Many Kenyans in the Nairobi metropolitan area, which has about 6.5 million people, spend an average of 45 per cent of their disposable income on food, Njonjo said. Many cities on the continent face similar challenges - urbanisation outpacing infrastructure development, inefficient agriculture and a fragmented retail industry, he said.

Nairobi is growing into a tech hub creating solutions for problems common in the developing world. In the past six years, Kenya received 58 per cent of reported investment deals in East Africa, according to the Africa Private Equity Venture Capital Association.

Twiga is first eyeing other East African cities, such as Dar es Salaam in Tanzania and the Ethiopian capital, Addis Ababa.

Other than distribution, Twiga is also working with selected farmers to modernise food production and expects dispatches to increase to 200-300 metric tonnes per day by the end of the year from about 120 tonnes currently, he said.

The company has raised $35 million from venture capital and convertible notes since inception in 2013. This year, Twiga will conduct a second round of financing to fund expansion in Nairobi and another round in 2020 for growth outside of Kenya, Njonjo said.

Existing investors include Wamda Capital, which had invested in the Middle Eastern ride-hailing company Careem Networks that Uber Technologies bought for $3.1 billion in a cash and stock deal last month.

 

 

TAGS : Twiga, Wamda Capital

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