In order to solve the challenges and inefficiencies in Nigeria's highly fragmented food sector, it wanted to use a marketplace model that connected suppliers and farms to restaurants and food businesses.
After noticing that some businesses complained of delivery times, quality of food supplies and inadequate set up to handle operations, Vendease switched from its middleman role to buying discounted products in bulk.
The company has doubled down on the pivot to raise $30 million in Series A funding.
According to Tunde Kara, the investment will be used to deepen operations, consolidate its presence in eight cities, move into new markets, and build new products to increase customers' efficiency.
Kara said on the call that he was building technology to efficiently move food from the point of production to the point of consumption. It is tailored to ensure that food flows efficiently from that point of production to the point of consumption.
Vendease gets $3.2M to help hotels and restaurants buy food supplies in Africa
African restaurants and food businesses have the ability to buy supplies, access financial services and power their operations. There is a reason why the supply chain is being improved. Most customers, including restaurants and food businesses, hospitals, hotels, and schools, are subject to $100 billion in annual losses according to the company. They range from unreliable supply to limited data to make informed procurement decisions. The platform is designed to help food businesses grow.
Over the last year, the platform helped its customers save $2 million in procurement costs and 10,000 in person-hours by moving 400,000 metric tonnes of food for them. According to Kara, the company has saved its customers $500,000 in overstocked costs. The chief executive attributed this progress to fully utilizing businesses' data and providing them with the necessary resources - particularly around inventory management - at every step of their journey.
Businesses usually buy what they don't need since they don't have accurate data. Kara commented on the company's progress and said that they help them to solve the problem in two ways. Businesses know that they can get anything on our platform in 12 hours, so they don't need to stock up on stuff. They can track their purchases and know how much is left before buying again.
Instead of using its books, the company now partners with banks and financial institutions to provide financing through its platform. Businesses have accessed more than $12 million of inventory through the embedded finance product. The company says its revenue has grown 5x over the last year, but it hasn't monetized its lending business.
The people who founded Vendease.
Vendease envisions itself as a plug-and-play solution for African restaurants and food businesses within the next three to five years. The chief executive of the company said that the participation of lead investors in the round boded well for the plan.
The partners at Partech Africa are backing Vendease because they believe it canunlock significant value in Africa's fragmented food supply chain and deliver robust solutions that impact critical issues around the food system The company raised debt from the local finance market in the round, as per a statement.
The equity round for a non-tech business closed quickly despite discussions about the venture capital market. The investors interest in the business and the emergence of other players, such as One Order and TopUp Mama, indicate massive room for growth in this market segment. The data from this food price index shows that the cost of food is 42% higher than it was in the previous year.
Despite the global food supply shortage and inflation, Vendease is helping our users save big and provide relative stability for their stock levels. Kara said that they should be shielded from the most severe effects of the global shortage. As we extend and entrench our technology in Africa and the world, we can have even more impact. That is the reason why we keep going.
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