For years, African restaurants have struggled with procurement and preservation of foodstuffs, resulting in waste of food products and loss of revenue. This situation created a huge friction in the African food markets that inspired Tunde Kara, Olumide Fayankin, Gatumi Aliyu, and Wale Oyepeju, to found Vendease.
The startup, which focuses on procuring and preserving food for restaurants in Africa – moving food from farms to restaurants, has grown into a multi million dollar company that has continued to attract investors.
Vendease announced that it has raised $30 million ($20 million equity and $10 million debt) in a Series A funding round. The round was led by Partech Africa and TLcom with participation from existing investors such as VentureSouq, Hustle fund, Hack VC, GFR Fund, Kube VC, Magic Fund and Kairos Angels.
Kara CEO, Fayankin COO, Aliyu CPO and Oyepeju CTO, came together in 2020 with the vision of solving Nigeria’s food industry’s inefficiencies and eventually expanding to other African markets. The platform is designed to mitigate losses and help food businesses thrive.
In about two years since it was founded, Vendease has raised more than $35 million. Last year, the YC-backed startup raised $3.2 million to expand its operations across Nigeria.
Kara told TechCrunch that the company plans to use the new funds to expand and consolidate its operations in eight cities in Nigeria and Ghana. He also said that it is planning to move into new markets and build new products to 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, described as a series of stacks, said most of its customers, including restaurants and food businesses, hospitals, hotels and schools, are subject to $100 billion in annual losses due to several factors. The factors include unreliable supply, wastage, limited data on making informed procurement decisions and little or no capital to fund procurement.
Over the last 12 months, the company said it has moved approximately 400,000 metric tonnes of food for its over 2,000 customers, helping them to save about $2 million in procurement costs and over 10,000 in person-hours.
Kara said that Vendease has saved its customers almost $500,000 in wastage costs due to overstocking by using the businesses’ data and providing them with the necessary resources — particularly around 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,” he said.
Besides food procurement and preservation, Vendease also offers financial services – Buy-Now-Pay-Later (BNPL) to its customers, which it now uses financial institutions that provide its financing – a different format from its earlier method. The company said it has been able to provide businesses more than $12 million worth of inventory via this embedded finance product.
“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,” Kara said.
