Nigerian business-to-business (B2B) online food procurement company, Vendease has raised $30 million Series A to expand its operations to other countries on the African continent. The funding which includes debt and equity financing is shared $10 million and $20 million accordingly. This Series A equity led by TLcom and Partech comes after its seed round of $3.2 million in October 2021 – to establish its growth and operations in Nigeria and Ghana, and to back its expansion across the continent.
The equity round also included VentureSouq, Hustle fund, Hack VC, GFR Fund, Kube VC, Magic Fund and Kairos Angels, who participated in previous round. Subsequently, Partner at TLcom, Andreata Muforo and General Partner at Partech, Cyril Collon are set to join Vendease’s board as new directors.
The Y Combinator-backed startup founded in January 2020 by Tunde Kara, Olumide Fayankin, Gatumi Aliyu and Wale Oyepeju started its operations by providing solutions in the hospitality sector for businesses such as hotels and restaurants by being a middleman and connecting them with food suppliers and farms and ensuring deliveries within 24 hours.
However, this model has been faulted by irregularities in the supply chain. This would make the company switch its model to being a stopping place for companies by liaising with food suppliers and buying discounted product in bulk while ensuring deliveries are carried out within 12 hours by third-party logistics companies.
According to a statement disclosed by the company, restaurants and food businesses lose $100 billion annually and are limited by access to data to inform procurement decisions, wastage and theft, as well as limited access to capital to fund procurement despite its daily service rendered to 700 million people across the continent.
“The company is building the operating system that automates the flow of food from farm to restaurant, optimises business operations across the value chain through accurate data deployment, reduces wastage and drives profitability. Restaurant owners simply need to download the app, complete the registration process in a few clicks and they will be able to access all the benefits of Vendease’s platform. They can also access working capital through Vendease’s Buy-Now-Pay-Later offering to maximise the growth opportunities available to them”.
So far, the company has supplied more than 400,000 metric tonnes of food through its platform, helping its users save more than $2,000,000 in procurement costs and more than 10,000 procurement man-hours in the past 12 months. Its data has also helped them reduce wastage from overstocking by an additional $485,000.
The company has seen 3x growth in the number of users on its platform and 5x growth in its revenue over the last 12 months. Users have also accessed more than $12 million worth of inventory via its embedded finance product.
Commenting on the raise, CEO and co-founder of Vendease, Tunde Kara said: “our mission is to enable the efficient flow of food across the continent, from point of production to point of consumption. It is more than just placing orders for supplies, we want to transform how the entire sector works and remove the bottlenecks that stunt the growth of restaurants and food businesses. With greater efficiency in the supply chain, we believe we can unlock more growth opportunities across board, which is why we are excited to have raised this round, led by two of Africa’s biggest VCs, who understand what it takes to power such an ambitious mission”.
“Restaurants and food businesses play a vital role in communities across the continent and Vendease is on a mission to bring affordability, convenience, and reliability to these businesses and builds a platform that allows the wider food sector to optimise their operations. We look forward to working alongside the team as they pursue the next phase of growth and unlock significant value in Africa’s fragmented food supply chain”, Partner at TLcom, Andreata Muforo said in a statement.
Cyril Collon, General Partner at Partech stated that: “Vendease is delivering vital solutions that impact critical issues around the food system in Africa. We are thrilled to be working with them to take these solutions to more restaurants and food businesses across the continent. We see huge scope for growth in Nigeria and beyond and we are very optimistic about what can be achieved”.