Group buying groceries platform Tushop raises US$3m to facilitate expansion in Kenya

KENYA – Tushop, Kenya based social-commerce platform that aggreges consumers’ groceries demand in the country’s capital, Nairobi, and offers free delivery of ordered items, has secured US$3m in a pre-seed funding round.

Founded in 2021, Tushop’s mission is to make access to groceries more affordable and more convenient for Kenyans and eventually all Africans.

Community group-buying saves consumers up to 60% on groceries compared to buying in supermarkets or informal retail outlets, while providing the added convenience of free delivery.

This is a similar concept undertaken by Pricepally in Nigeria, where the group-buying platform matches customer’s food demands with supplies directly from farmers and wholesalers.

The problems that this model solves in Africa are significant as it drives convenience and enables buyers to save a few coins.

Africans spend US$260 billion yearly on food with Kenyans on average spending 46% of their income on food compared to 6% in America, 22% in China, and 16% in Brazil.

“Tushop is unique in this market because we know the customer – we are our own customers! We have grown up experiencing the problem of unaffordable food on the one hand and the need to have additional ‘side hustles’ on the other because of persistently low incomes.

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“We also have first hand experience of the difficulties manufacturers face when moving goods through a fragmented supply chain, which creates distance between them and the customers they serve.

“We are therefore hyper-focused on delivering a superior experience for suppliers, ‘side-hustling’ Community Leaders, as well as our end-customers in an integrated manner,” said Cathy Chepkemboi, Founder & CEO at Tushop.

The funds will be deployed to grow Tushop’s team, invest in tech to make its platform as easy to use as possible, and to further expand across Nairobi before rolling the service out to other cities in Kenya.

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The company works with “Community Leaders” who collate orders from their neighbours and manage door-to-door deliveries.

This not only simplifies last mile delivery, but also gives the Community Leaders additional income for coordinating and delivering orders.

Similar community group-buying companies in other markets have achieved significant success, such as Nice Tuan in China and Favo in Brazil.

The funding round was led by 4DX Ventures and with participation from JAM Fund, Breyer Capital, Chandaria Capital, TO Ventures, Golden Palm Investments, FirstCheck Africa, and DFS Lab.

“We are stoked to be working with some of the leading investors globally and locally who really understand the African space from a logistics, tech, and payments perspective, and look forward to justifying their faith in us with future growth, commercial success, and meaningful social impact,” said Cathy.

Peter Orth, Managing Partner at 4DX added, “We think that the market opportunity for Tushop is incredibly large, and that Cathy is the right founder to go after it given her deep understanding of the market, and impressive execution and growth thus far.

“We’re thrilled to join such a strong team of other investors and advisors to help Tushop become the dominant player in group-buying across Africa.”

Wasoko (formerly Sokowatch) also joined to make their first strategic institutional investment into Tushop, signalling confidence in the team’s ability to capture the community group-buying opportunity in Africa.

Daniel Yu, CEO of Wasoko commented, “It has been great witnessing Tushop’s incredible growth, driven by strong leadership and a team that embodies a true understanding of consumers and their communities.

“We are excited to work with a team that shares our vision of affordability and equitable distribution of goods across Africa.”

The oversubscribed round included additional participation from a number of angel investors including GB (CEO, Flutterwave), Raja Kaul (President, Sundial Group), Eli Pollak (CEO, Apollo Agriculture), and Ida Mannoh (Director of Growth, Chipper Cash).

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