Kenya: Impact fund participates in Twiga's $50m fundraise

OP Finnfund Global Impact Fund I, the first global emerging markets impact fund in Finland, has invested $3 million in Kenyan headquartered B2B e-commerce food distribution platform Twiga. OP Finnfund Global Impact Fund I joins a group of investors, led by Creadev, in a financing package totalling $50 million.

Twiga operates a B2B e-commerce system to simplify the supply chain between fresh food producers, FMCG manufacturers and retailers. This removes the need for many intermediaries, significantly lowering the cost of food for consumers.

“Twiga has been bridging the gaps in food and market security since 2014 in Kenya, and with that experience we are ready to expand our offering to East Africa in the coming months and West Africa in 2022,” says Peter Njonjo, CEO and co-founder of Twiga. “This financing package helps us to roll out our proven template to other African markets, adapted to the local environment.”

Population growth and urbanisation create major challenges for food security in Africa. Twiga’s approach tackles the inefficiencies in Africa’s domestic food production and distribution ecosystems. Sustainable agriculture is one of the focus sectors for OP Finnfund Global Impact Fund I and previous investments include for example EthioChicken, an Ethiopian poultry company. “We are pleased to contribute to the funding that aims to increase affordable access to food,” says Tuomas Virtala, head of asset management at OP Corporate Bank. “It’s remarkable that Twiga has managed to quadruple its revenue during the Covid-19 pandemic. We believe it shows how viable their business model is.”

“Twiga’s mobile-based food supply platform showcases how digital innovations can increase productivity and improve access to products and services,” says Finnfund’s investment manager, Johanna Raehalme. “Removing inefficiencies in the value chain creates positive change for both vendors, farmers and customers.”

Twiga works with both commercial and smallholder farmers and employs over 1,000 people. The company has over 100,000 registered customers for its services across Kenyan cities, delivering over 600 metric tonnes of product to over 10,000 retailers daily.

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