NIGERIA – Vendease, a Nigeria based online marketplace that allows restaurants and other food businesses to buy supplies straight from manufacturers and farms, has raised a seed round of US$3.2 million.
The round was led by San Francisco-based venture capital firm Global Founders Capital and saw the partnership of Y Combinator, Hustle Fund, Liquid 2 Ventures, Hack VC and Soma Capital participated.
Other individual local investors and early backers such as Paga CEO Tayo Oviosu, Remita CEO John Obaro and Magic Fund also took part in the round.
The news of the fund raising comes seven months after the company, took part in Y Combinator’s winter batch that included nine others African startups, reports Techcrunch.
Vendease, founded in January 2020, tries to solve the challenges and inefficiencies in Africa’s highly fragmented food sector, starting with Nigeria.
Initially, the company found a sweet spot in a purely decentralized marketplace play connecting suppliers and farms on one side with restaurants and food businesses on another.
When a restaurant or food business places an order, the system generates all the possible suppliers that can fulfill it, looks at the best pricing versus quality and assigns that order to the supplier.
According to the company, delivery is made within 24 hours, either by itself or third-party logistics providers.
Still, the company recognized that these businesses needed more quality and operational help. While some complained of delivery times and quality of food supplies, others did not have sophisticated operations to handle them.
Vendease streamlines operations
This led to Vendease building a series of stacks — logistics, storage, payments, inventory management, embedded finance — to control the movement of food supplies from one point of production to the endpoint of consumption.
The company has also employed extensive quality control measures for the food supplies on its platform at the point of delivery or acceptance into its warehouse.
The platform also has an option that allows food businesses to receive free supplies for any order that turns out unsatisfactory.
From the time Vendease launched until now, one thing has remained constant in the industry it plays in: the fluctuation of food prices in Nigeria.
These are some of the unforeseen but Vendease has created a predictive analysis and storage system to help businesses predict future food prices, store food in advance, and peg their prices for any duration depending on the food category.
Further to that, Vendease has moved 100,000 metric tonnes of food. For a startup that is a little over eighteen months old, moving that amount of food is a noteworthy feat.
Moving this quantity, coupled with Vendease’s technology stack, has allowed the company to analyze what its customers want before making their orders, which is why the company now has its warehouses and logistics service.
Last month, the YC-backed company hit an annualized transaction volume of US$12.9 million and US$1.2 million in annual recurring revenue.
On the platform’s financing side, over 1,000 businesses have accessed more than US$3 million in supply chain finance so far.
Vendease is now one of the platforms digitizing the food supply chain for restaurants and food businesses across the continent joining the likes of Twiga which launched in Kenya seven years ago.
Now that Vendease is in the fray, it wants to establish itself as the leader amongst an upcoming pack with newer players such as Kenya’s Kibanda TopUp.
Vendease currently operates in three Nigerian cities — Lagos, Abuja and Ibadan, with some of the biggest food brands in the country such as Hard Rock, Krispy Kreme and Shiro.