Twiga Foods, a Kenyan-based start-up connecting smallholder farmers in rural areas to informal retail vendors in cities has raised a $10 million investment from IFC, a member of the World Bank Group, TLcom, and the Global Agriculture and Food Security Program (GAFSP) to expand operations and offer new services.
The round was co-led by IFC and TLcom with participation from previous investors Wamda Capital, DOB Equity, 1776 and Adolph H.Lundin.
As part of the deal, Wale Ayeni, who leads IFCs’ venture capital activities in Africa, and Maurizio Caio, Managing Partner at TLcom will join the board.
According to Grant Brooke, CEO Twiga Foods, “The TLcom and IFC investment will enable us to reach more farmers, improve efficiency in service delivery and increase access to high quality produce and foodstuffs for vendors. We will continue in our mission to provide affordable, quality, and safe food to Kenya’s urban consumers, and reliable markets for farmers across the country.”
Launched in 2014, Twiga Foods, which has been backed by other ventures such as DOB Equity, uses mobile phone technology to match supply and demand, aggregating market participants and finding buyers for farmers’ produce in Africa’s large, but highly fragmented fruit and vegetable market.
Twiga’s m-commerce platform guarantees farmers access to a fairly priced, transparent, mobile marketplace while vendors can consistently source high-quality produce, which is conveniently delivered for free to their doorstep by Twiga. By increasing efficiency in the supply chain, Twiga is able to reduce waste and ultimately reduce food prices for end consumers.
The company initially started off matching vendors to banana farmers, but now works with other produce such as tomatoes, cabbage, mango, potato and onion. Farmers who sign up with Twiga receive payment within 24 hours. Twiga serves over 13,000 farmers and 6,000 vendors in Kenya and has collection centers across the country, in addition to a central pack house with cold storage facilities, and mobilized trucks and vans for swift collection and distribution of produce.
“Access to markets is a key concern for smallholder farmers across Africa, many of whom live in remote areas. IFC’s investment in Twiga supports a disruptive startup that is helping create a more transparent, efficient supply chain, which connects farmers directly to markets, helping them earn more,” said Nikunj Jinsi, IFC’s Global head of Venture Capital.
“Twiga is proving that smart use of technology and innovative business models can vastly improve large and inefficient African markets such as the agricultural supply chain. With capital and business building support coming from this set of investors Twiga is positioning for massive value generation, demonstrating the increasing maturity of the Africa venture capital space”, said Maurizio Caio from TLcom.
Agriculture is a key driver of Kenya’s economy, accounting for an average of 25 per cent of total GDP from 2013 to 2017. Along with the investment, IFC’s Advisory Services team will work with Twiga to support farmers in improving food safety, environmental and social practices.
IFC’s investment includes funding from the private sector window of the Global Agriculture and Food Security Program (GAFSP)which is collected from governments of Australia, Canada, Japan, the Netherlands, the U.K. and the U.S.