African online marketplace Vendease has secured $30 million in a $20 million equity and $10 million debt Series A funding round led by Partech Africa and TLcom. Existing investors such as VentureSouq, Hustle Fund, Hack VC, GFR Fund, Kube VC, Magic Fund, and Kairos Angels were participants in the funding round. According to an issued statement, Vendease raised debt from the local finance market.
The latest funding round follows the $3.2 million seed round concluded in October 2021. When the company launched two years ago, its aim was to mitigate the challenges, such as inefficiency and time constraints, associated with getting food supplies in the highly fragmented African sector. It started out on a decentralized marketplace model – connecting suppliers and farms on one side with restaurants and food businesses on the other; the company was basically a middleman.
Vendease has since switched from its middleman responsibility after several businesses complained of problems such as delivery times, quality of food supplies, and inadequate set-up to handle operations. The company now buys discounted products in bulk, stores them, and delivers them to businesses that need them via third-party logistics partners.
According to CEO Tunde Kara, the company will use the latest investment to deepen its operations, strengthen its presence in the eight cities across Nigeria and Ghana where it exists, enter new markets, and offer new products that’ll increase customers’ efficiency. “We’re building technology to efficiently move food from the point of production to the point of consumption. Everything we build at Vendease: financing, logistics, warehousing, inventory management, is tailored towards ensuring that food flows efficiently from that point of production to the point of consumption,” he said.
Vendease is very particular about increasing the efficiency of its customers. According to the company, most customers (hotels, hospitals, schools, restaurants, and food businesses) lose an estimated $100 billion every year due to factors like unreliable supply networks, wastage, limited data on making informed procurement decisions, little or no capital, etc. Vendease is, therefore, building its platform to fully mitigate these problems.
Vendease claims to have moved an estimated 400,000 metric tonnes of food for over 2,000 customers in the last 12 months. The company added that its system has helped save about $2 million in procurement costs, and 10,000 in-person hours. The company’s CEO Tunde Kara, who founded Vendease alongside Olumide Fayakin, Wale Oyepeju, and Gatumi Aliya, claims that the company has also helped save about $500,000 in wastage costs due to overstocking. He mentioned that this was possible due to the utilization of business data and the provision of resources such as inventory management.
“Since businesses don’t have access to accurate data, they usually buy what they don’t need. We help them to solve that problem in two ways. One, because businesses know they can get anything on our platform in 12 hours, they don’t need to stock some of the things they would’ve stored before. Two, they can also track what they bought and know how much is left before they need to buy again,” CEO Tunde Kara explained.
Apart from switching from a middleman position, the company has also changed how it offers BNPL services. It now partners with banks and financial institutions to provide financing via its platform.
“Something important to us about our current growth and impact is despite the ongoing global food supply shortage and inflation, Vendease is helping our users save big and provide relative stability for their stock levels. Shielding them (to a large extent) from the most severe effects of the current global shortage. What excites us is we can have even more impact as we extend and entrench our technology within Africa and the rest of the world. And that’s what keeps us going,” Tunde Kara added.
According to Andreata Muforo, a partner at TLcom Capital, and Cyril Collon, general partner at Partech Africa, they are backing Vendease because they believe that the company can unlock significant value in Africa’s fragmented food supply chain and deliver robust solutions that impact critical issues around the food system on the continent. This was revealed in Vendease’s statement.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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