For small and mid-sized restaurants in Nigeria and most of Africa, food procurement can be a complex process to manage. The system is such that a business can easily run out of money or have considerable savings.
Most restaurants don’t have access to deal directly with farms to get better deals because they lack the staffing to chase them. Besides, they also don’t have the aggregation pull as single entities to directly get good value from the farms.
Vendease, a Y Combinator-backed digital platform that allows restaurants in Africa to buy supplies, access financial services and power their business operations, has raised $30 million in an equity and debt funding round to consolidate its growth and operations in Nigeria and Ghana, and to support its expansion across the continent.
The series A equity round of $20 million was co-led by TLcom and Partech, in a rare joint investment by two of the biggest Africa-focused funds. The equity round also included VentureSouq, Hustle fund, Hack VC, GFR Fund, Kube VC, Magic Fund and Kairos Angels, who re-invested after participating in the previous round. The $10 million debt round was raised from the local finance market.
Africa's restaurants and food businesses feed 700 million people across the continent daily. However, these businesses lose $100 billion annually due to expensive and unreliable supply, limited access to data to inform procurement decisions, wastage and theft, as well as limited access to capital to fund procurement.
"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," Tunde Kara, CEO and co-founder of Vendease said.
"With greater efficiency in the supply chain, we believe we can unlock more growth opportunities across the 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."
Vendease's digital procurement engine makes it easier for restaurants in 8 cities across Nigeria and Ghana to buy food supplies at considerably cheaper rates than open market prices, with guaranteed 12-hour delivery. The company is building an 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.
Despite ongoing inflation and global shortage in the food supply, Vendease’s solutions have delivered significant savings for its users and provided relative stability for their stock levels. Over the last 12 months, Vendease has moved 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.
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.
The new funding will support the delivery of these services to more restaurants and food businesses across Africa, as well as the development of new solutions and services, to drive growth across the food value chain.
Following their investments, Andreata Muforo (Partner at TLcom) and Cyril Collon (General Partner at Partech) will join Vendease’s board as new directors.
Andreata Muforo, Partner at TLcom, said, “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.”