IFC, a member of the World Bank Group, TLcom, and the Global Agriculture and Food Security Program (GAFSP) today announced a $10 million investment in Twiga Foods, a Kenyan-based start-up connecting smallholder farmers in rural areas to informal retail vendors in cities.
The investment was co-led by IFC and TLcom, a Pan-African venture capital firm, with participation from previous investors Wamda Capital, DOB Equity, 1776 and Adolph H.Lundin. As part of the deal, Wale Ayeni, who leads IFC’s venture capital activities in Africa, and Maurizio Caio, Managing Partner at TLcom will join the board.
The Twiga Foods platform uses mobile phone technology to match supply and demand, aggregating market participants and finding buyers for farmers’ produce in Africa’s large, but highly fragmented fruit and vegetable market. Twiga’s m-commerce platform enables vendors to order fresh produce, as and when needed, from farmers across Kenya. The system is a win for both sides – farmers have guaranteed access to a fairly-priced, transparent, mobile marketplace while vendors can consistently source high-quality produce, which is conveniently delivered for free to their doorstep by Twiga. By increasing efficiency in the supply chain, Twiga is able to reduce waste and ultimately reduce food prices for end consumers.
Twiga will use the new investment to expand operations and offer new services. Since it launched operations in 2014, Twiga has grown to work with over 13,000 farmers and 6,000 vendors in Kenya. The company initially started off matching vendors to banana farmers, but now works with other produce such as tomatoes, cabbage, mango, potato, and onion. Farmers who sign up with Twiga receive payment within 24 hours.
The company operates collection centers across the country, in addition to a central pack house with cold storage facilities, and mobilized trucks and vans for swift collection and distribution of produce. The smooth logistics system limits Twiga’s post-harvest losses to five percent, as compared to 30 percent at informal markets, where farmers typically sell produce.
Agriculture is a key driver of Kenya’s economy, accounting for an average of 25 per cent of total GDP from 2013 to 2017. Along with the investment, IFC’s Advisory Services team will work with Twiga to support farmers in improving food safety, environmental and social practices.
IFC supports the mobile technology sector to help promote social inclusion and business growth. Over the past three years, IFC has invested over $1.5 billion in telecommunication, technology, and startup companies globally.
Original source: IFC
Published on 15 November 2018
