Vendease, food delivery platform for African restaurants, raises $30 million led by Partech Africa and TLcom

When Vendées launched in January 2020, it wanted to solve the challenges and inefficiencies in Nigeria’s highly fragmented food sector using a marketplace model that connects suppliers and farms with restaurants and food businesses, with facilitated deliveries within 24 hours.

But over the next few months, Vendease shifted its role as an intermediary – after noticing that some of these businesses complained about delivery times, the quality of food supplies and an inadequate set-up to handle operations – to one where, building on its relationship with food suppliers, buys products at a wholesale discount, stores them and makes deliveries through third-party logistics partners.

The YC-backed food sourcing platform has doubled down on the foundation — a tool for the company’s seed round for $3.2 million last October — to raise $30 million in Series A funding (split between $20 million in equity and $10 million in debt).

CEO Tunde Karain an interview with TechCrunch, said that Vendease plans to use the investment to deepen operations, consolidate its presence in eight cities in Nigeria and Ghana (the company recently expanded to the latter), enter new markets and build new products to increase customer efficiency.

“We’re building technology to efficiently move food from the point of production to the point of consumption,” Kara said on the call about his company’s pursuit. “Everything we build at Vendease: financing, logistics, warehousing, inventory management, is tailored to ensure that food flows efficiently from that point of production to the point of consumption.”

Vendease enables African restaurants and food businesses to purchase supplies, access financial services and power their business operations. There’s a reason why Vendease is deep in improving efficiency in this supply chain. According to the company, most customers, including restaurants and food businesses, hospitals, hotels and schools, are subject to annual losses of $100 billion due to several factors. These range from unreliable procurement and waste to limited data to make informed procurement decisions to little or no capital to fund procurement. Its platform, described as a series of stacks, is designed to mitigate losses and help food businesses thrive.

The platform claims to have moved approximately 400,000 metric tons of food for its 2,000+ customers and helped them save around $2 million in shipping costs and over 10,000 man-hours in the past 12 months. Kara, who founded the company with Olumide Fayankin, Gatumi Aliyu and Wale Oyepeju, also mentioned that Vendease has saved its customers almost $500,000 in lost costs due to overstocking. The CEO attributes this progress to making full use of business data and giving them the resources they need — especially around inventory management — at every step of their journey, including delivery routes: Vendease reduced its delivery time from 24 hours to 12 hours.

“Because businesses don’t have access to accurate data, they tend to buy what they don’t need. We’re helping them solve this problem in two ways,” Kara commented on the company’s progress. “First, because businesses know they can get everything on our platform in 12 hours, they don’t have to store some of the things they would have stored before. Second, they can also keep track of what they’ve bought and know how much is left before they need to buy again.

Although Vendease applies data on how it disburses working capital through its BNPL offering, there is a change in strategy from what it was doing last year: instead of using its books, the company is now partnering with banks and financial institutions to provide financing through its platform. To date, businesses have accessed over $12 million worth of inventory through the built-in finance product. Its revenue, which the company says has grown 5-fold in the past year, comes from deals it makes with suppliers; has not yet monetized its lending business.

Founders of the Vendease

Ultimately, Vendease, while building the operating system that automates the flow of food from farm to restaurant, envisions itself as a plug-and-play solution for African restaurants and food businesses that have yet to launch in the next three to five years . The participation of leading investors in this round, TLcom Capital and Partech Africa (both of which control large pan-African funds), bodes well for this plan, the CEO said, adding that having the two investors on board means his company has supporters, “ ready to work the long haul.”

Andreatta Muforo, partner at TLcom Capital and Cyril Colon, general partner at Partech Africa, say they support Vendease because they believe it can unlock significant value in Africa’s fragmented food supply chain and provide robust solutions that address critical issues surrounding the continent’s food system, according to the statement shared by Vendease. Other investors in the round include existing investors VentureSouq, Hustle fund, Hack VC, GFR Fund, Kube VC, Magic Fund and Kairos Angels (the company raised debt from the local financial market, according to a statement).

For a non-fintech business, Vendease’s capital round closed a little quickly despite talk of a cooling venture capital market, the parties involved told TechCrunch. Investors’ interest in the business and the emergence of other players such as OneOrder and TopUp Mama, show huge room for growth in this market segment where the needs of restaurants and food businesses are a priority. This is more true in light of rising inflation and global food shortages, where the cost of food is 42% higher than it was between 2014 and 2016, according to data from food price index.

“Something important to us about our current growth and impact is that despite ongoing global food shortages and inflation, Vendease is helping our customers save big and provide relative stability to their inventory levels. Shielding them (largely) from the worst effects of the current global shortage,” Kara commented. “What excites us is that we can have an even greater impact as we expand and validate our technology in Africa and the rest of the world. And that keeps us going.”

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