A stark reality found in Africa is the fluctuating inflation rate on food items. According to reports, eggs, rice, and beans saw a growth of up to 65% from one year ending in July 2021. Tech start-up, Vendease, is working to provide a solution that will prepare farmers and businesses to remain ahead of the unpredictable economic shifts in the food industry.
The ambitious start-up recently raised $3.2 million in a seed round, TechCrunch reports. The round was led by venture capital firm Global Founders Capital and backed by Y Combinator, Hustle Fund, Liquid 2 Ventures, Hack VC and Soma Capital. Interested prospects and local investors Paga CEO Tayo Oviosu, Remita CEO John Obaro, and Magic Fund also tapped in.
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The online marketplace was founded in January of 2020 by Tunde Kara, Wale Oyepeju, Gatumi Aliyu, and Olumide Fayankin to spearhead the purchase of supplies from manufactures and farms to businesses and restaurants. The startup found its footing initially in Nigeria when it found a promising landing in a decentralized marketplace.
To spur the process, restaurants or food businesses place an inquiry and the internal system will craft a list of potential suppliers in the regions who can complete the order. To provide inquirers with the best deal for their dollar, Vendease will begin a competitive analysis to determine the best value in comparison to the quality of the product. Within 24 hours, the selected supplier will be expected to deliver the goods to the respective party.
Despite establishing a solid foundation, the company realized there were deeper-rooted issues that would need to be addressed to provide greater support to its consumers. Delivery times, the integrity of the food supply received, and operational inefficiencies were issues brought to light.
The company immediately took action and created new systems processes such as “logistics, storage, payments, inventory management, embedded finance, — to control the movement of food supplies from one point of production to the endpoint of consumption,” Co-founder and CEO Tunde Kara told TechCrunch.
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In addition to the listed measures, Vendease has adopted reassuring practices to protect the financial assets of its participating partners such as ensuring free supplies for goods that are deemed not up to par. The tech startup has also adopted predictive analysis and a storage system so businesses can stay ahead of the ever-changing pricing of food.
The feature has proven to be a glimmer of hope for businesses who have saved money and human capital, TechCrunch reports.
“When we compare market prices to what users buy on our platform, we’ve approximately saved them about $480,000 in the last nine months, cutting a lot of unnecessary expenses from their general costs — savings that can go into other things in terms of expansion and growth,” Kara says in a press statement.
“Proactively, in our small way, we are helping to grow the GDP for the food businesses both on the farmers and vendor side of the marketplace,” Kara continues.
Despite Vendease being in its 18 months of operation, their intentionality early on may set them apart from the competitors. Currently housed in three Nigerian cities Lagos, Abuja, and Ibadan, the online marketplace will use its newly acquired funding to reach other cities, solidify new partnerships with payment services and banks, and revamp its technology.