Tanzania’s East Africa Foods has raised $40 million to expand its agricultural supply chain into Kenya, targeting 100,000 smallholder farmers as Kenya’s once high-profile food distribution startup Twiga Foods enters administration after years of financial and operational difficulties.
The financing includes a $26 million Series B equity round led by InfraCo, the investment arm of the Private Infrastructure Development Group (PIDG), alongside Dutch development bank FMO and social impact investor Oikocredit. Existing investors Acumen Resilient Agriculture Fund, Goodwell Investments, Africa Eats and FINCA International also participated, while The Schmidt Family Foundation provided debt funding.
The investment will expand East Africa Foods’ processing, storage and transport infrastructure and strengthen its digital platform for coordinating produce sourcing and distribution. The company plans to deepen its operations in Tanzania and enter Kenya, where it sees an opportunity to connect fragmented agricultural production with urban retailers.
The deal comes as Twiga Foods, which built a technology-enabled distribution network linking farmers and food manufacturers to informal retailers in Kenya, faces administration. The company’s operating entity, GT Flow Limited, entered administration in August, followed by its parent company, now known as Templar Field Limited, in September, according to published administration notices and reports.
Twiga’s difficulties underline the financial and operational challenges facing businesses that must coordinate produce procurement, transport, warehousing and payments while serving retailers operating on tight margins. East Africa Foods is pursuing a related market opportunity, but its expansion will require it to build a sustainable operating model as well as physical infrastructure.
East Africa Foods targets 100,000 farmers
East Africa Foods currently sources produce directly from more than 28,000 registered smallholder farmers and supplies more than 10,000 urban retailers, according to PIDG.
The company aggregates, grades, stores and processes produce before distributing it using a fleet of more than 100 trucks. Its consumer brands include Onja, Golden Banana, Onion King and Potato King.
East Africa Foods says it has reduced food losses across its own supply network by one-third. It plans to invest in additional processing facilities, storage capacity and long-haul transportation to extend those gains as it expands into Kenya.
The company estimates that up to 40% of food produced in Kenya and Tanzania is lost before reaching consumers. It attributes much of the loss to gaps in post-harvest infrastructure, including inadequate aggregation, storage and reliable transportation, rather than a lack of agricultural production.
“A third of what our farmers grow never reaches anyone’s table. That is not a farming problem: it is an infrastructure problem, and it is solvable,” founder and Chief Executive Officer Elia Timotheo said in the funding announcement.
The company aims to reach 100,000 smallholder farmers over the next few years, with women expected to account for 45% of those served. It also plans to expand training in climate-smart farming methods and improve the consistency of market access and farmer incomes.
The expansion will extend the digital systems East Africa Foods developed in Tanzania to new markets, allowing the company to coordinate sourcing, branch operations and retailer deliveries as its network grows.
Twiga Foods offers a cautionary comparison
Twiga Foods became one of Kenya’s best-known agritech startups by using technology and distribution infrastructure to connect food producers and manufacturers with informal retailers. The company raised about $110 million over its funding history, but later faced layoffs, operational disruption and a restructuring of its business.
In 2025, Twiga shifted toward a broader consumer-goods distribution strategy, including investments in regional distributors, while suspending its own Nairobi distribution operations for a period. Its subsequent entry into administration in 2026 marked a further setback.
The two companies share a broad objective: making food distribution more efficient by connecting producers with retailers. Both operate in a market where fragmented supply, transport costs, food spoilage and limited storage can erode margins throughout the value chain.
Their approaches and circumstances, however, should not be treated as identical. East Africa Foods describes a model built around direct farmer sourcing, produce handling, storage, processing and an owned truck fleet. Twiga developed a technology-led distribution network and later pursued a broader fast-moving consumer goods distribution strategy.
The comparison nevertheless raises a central question for investors in African agritech: whether companies can generate sufficient margins and cash flow to support the physical infrastructure needed to move food reliably at scale.
Warehouses, processing facilities, storage systems and trucks require capital and ongoing maintenance. Produce distribution also depends on efficient inventory management, predictable demand, timely payments and the ability to limit spoilage. Expanding the number of farmers and retailers served does not automatically translate into profitability if the costs of moving and storing goods grow faster than revenue.
East Africa Foods’ new funding gives it additional resources to build its network, but its planned expansion into Kenya will test whether its Tanzanian operating model can be replicated in another market while maintaining financial discipline.
Investors back regional food infrastructure
PIDG said the investment would support more efficient agricultural supply chains and improve access to markets for smallholder farmers. The programme includes new collection and fulfilment centres, processing facilities and long-haul trucks, alongside digital systems for inventory management and route planning.
“Strengthening EAF’s presence in Tanzania, and expanding its efficient, data-driven business into Kenya, will enable the company to mobilise future finance into this vital sector,” said Claire Jarratt, PIDG’s head of investment management for InfraCo.
Oikocredit and FMO also backed the equity round, citing the potential for improved food security, reduced post-harvest losses and higher incomes for farmers.
The $26 million equity investment completed a broader financing package of approximately $40 million, including debt funding from The Schmidt Family Foundation. EKTA Partners acted as the exclusive financial adviser.
The transaction received competition and regulatory clearances in COMESA, Tanzania’s East African Community competition authority and the Zanzibar Fair Competition Commission, according to PIDG.
East Africa Foods now plans to extend its operations beyond Tanzania, using the new capital to expand physical infrastructure and digital coordination across the supply chain. Its ability to improve food distribution while generating sustainable returns will be central to the success of its regional expansion.
