When vendease Launched in January 2020, it set out to solve the challenges and inefficiencies in Nigeria’s highly fragmented food sector using a market model that linked suppliers and farms to restaurants and food companies, facilitating 24-hour deliveries.
But over the next few months, Vendease switched from its role as an intermediary — after noting that some of these companies complained about delivery times, quality of the food supply, and inadequate set-up to handle operations — to a true , building on its relationship with food suppliers, buys discounted products in bulk, stores them and delivers them through third-party logistics partners.
The YC-backed food sourcing platform has doubled the pivot — essential to the company’s $3.2 million starting round last October — to raise $30 million in Series A financing (split between $20 million in equity and $10 million). debts).
Director Tunde Karasaid in an interview with australiabusinessblog.com 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 launch new products. to increase the number of customers. efficiency.
“We are building technology to move food efficiently from the point of production to the point of consumption,” Kara said during the phone call about his company’s drive. “Everything we build at Vendease: financing, logistics, warehousing, inventory management, is focused on ensuring that food flows efficiently from that point of production to the point of consumption.”
Vendease enables African restaurants and food businesses to purchase necessities, access financial services and boost their business operations. There is a reason why Vendease is thorough in improving efficiency in this supply chain. According to the company, most customers, including restaurants and food companies, hospitals, hotels and schools, are subject to annual losses of $100 billion due to various factors. They range from unreliable supplies and waste to limited data on making informed purchasing decisions to little or no capital to fund purchasing. Described as a series of stacks, the platform is designed to mitigate losses and help food companies thrive.
The platform claims to have moved approximately 400,000 tons of food for its more than 2,000 customers in the past 12 months, helping them save approximately $2 million in procurement costs and more than 10,000 in man-hours. Kara, who founded the company with Olumide Fayankin, Gatumi Aliyu and Wale Oyepeju, also mentioned that Vendease has saved its customers nearly $500,000 in waste costs due to overstocking. The CEO attributed this progress to taking full advantage of companies’ data and equipping them with the necessary resources — especially around inventory management — at every step of their journey, including delivery routes: Vendease has reduced the delivery time from 24 to 12 hours.
“Because companies don’t have access to accurate data, they usually buy what they don’t need. We help them solve that problem in two ways,” Kara said of the company’s progress. “First, because companies know they can get everything to our platform in 12 hours, they don’t have to stock some of the things they would have previously stocked. Second, they can also track what they have bought and know how much is left before they have to buy again.”
As Vendease applies data on how it spends working capital through its BNPL offering, its strategy has changed from what it did 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, companies have gained access to more than $12 million in inventory through the embedded finance product. Revenue, which the company says has grown 5x in the past year, comes from deals it closes with suppliers; it has yet to monetize its lending.
Ultimately, as it builds the operating system that automates the flow of food from farm to restaurant, Vendease sees itself as a plug-and-play solution for yet-to-be-launched African restaurants and food companies in the next three to five years. The participation of lead investors in this round, TLcom Capital and Partech Africa (both control major pan-African funds), bodes well for that plan, the chief executive said, adding that having both investors on board means his company lenders has “ready to go”. the long term.”
Andreata Muforo, a partner at TLcom Capital and Cyril Collon, 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 deliver robust solutions impacting critical problems around the food system on the continent, 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 company, Vendease’s stock round closed somewhat quickly despite talks about a cooling venture capital market, the parties involved told australiabusinessblog.com. Investor interest in the company and the emergence of other players such as: OneOrder and TopUp Mama, point to tremendous growth opportunities in this market segment where the needs of restaurants and food companies 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 between 2014 and 2016, according to data from this food price index.
“What’s important to us about our current growth and impact is that, despite the ongoing global food shortage and inflation, Vendease is helping our users save big and provide relative stability to their inventory levels. They protect (to a large extent) from the most serious impacts of the current global deficit,” Kara said. “What excites us is that we can have even more impact as we expand and embed our technology in Africa and around the world. And that keeps us going.”