Kenya’s Twiga Foods has raised a total of $30 million from lenders and investors led by Goldman Sachs. Top American investment bank Goldman Sachs is the latest to acquire a stake in Kenyan start-up Twiga Foods following a Sh2.44 billion ( $23.75 million) deal that will help the agro-based firm spread across the country and Africa.
The B2B food distribution company financed $6.25 million of the funding in convertible debt and $23.75 million in equity, classified as a Series B round. IFC, TLcom Capital, and Creadev joined Goldman on the VC side.
Twiga will use the funds to set up a distribution center in Nairobi and deepen its conversion to offering supply chain services for both agricultural and FMCG products.
The Nairobi based company will invest in expanding into more cities in Kenya, including Mombasa. Twiga is also targeting Pan-African expansion by third quarter 2020.
“Goldman Sachs is getting a stake and it will be the lead institutional investor in Twiga. It is providing the bulk of the $23.75 million, said Peter Njonjo, who became the company’s chief executive in March after stepping down as president of Coca-Cola West and Central Africa.
“This funding enables us to invest in our technology and organisation to tackle the inefficiencies in Africa’s domestic food production and distribution,” he added.
Besides fresh produce, Twiga has in recent months ventured into processed foods like rice, maize flour, cooking oil, milk, juice and sugar following demand from manufacturers keen on tapping into the firm’s technology-based distribution network.
Co-founded in Nairobi in 2014 by Njonjo and Grant Brooke, Twiga Foods serves around 3,000 outlets a day with produce through a network of 17,000 farmers and 8,000 vendors. Parties can coordinate goods exchanges via mobile app using M-Pesa mobile money for payment.