Tushop, a female-founded digital platform that aggregates Kenyan consumers into groups to buy groceries more cheaply, has secured $3 million in pre-seed funding.
The investment was led by early-stage investment firm 4DX Ventures. Other investors participating in this round include JAM Fund, Breyer Capital, Chandaria Capital, TO Ventures, Golden Palm Investments, the female-led and female-focused FirstCheck Africa, and DFS Lab.
B2B retail platform Wasoko, which secured its own $125 million Series B round of funding in March earlier this year, also participated.
Several prominent angel investors in the region invested too including Flutterwave co-founder Olugbenga “GB” Agboola, Eli Pollak, the co-founder of recently-funded Apollo Agriculture, Ida Mannoh, the director of growth at Chipper Cash, and Raja Kaul, group president of Sundial Group.
Despite being founded last year, Tushop secured pre-seed funding from a diverse pool of investors, highlighting growing investor interest in e-commerce startups across Africa. Tushop’s investment adds to multiple investments secured by such startups in the first quarter of 2022 alone. In Kenya alone, Marketforce and Cartnshop also raised funding this year.
Tushop will use the funding to expand further in Nairobi — ahead of expansion to other regions, enhance its technology stack and grow the team.
How it works
After spending time working as a shopping marketing analyst for the consumer foods giant Unilever, Cathy Chepkemboi founded Tushop to help customers access groceries cheaply and conveniently. More specifically, she wants to reduce Africans’ spending on groceries to a maximum of 10% of their income. According to Tushop, Kenyans spend around 46% of their income on food.
By creating a B2C community group-buying platform, Tushop customers can purchase groceries in groups, thereby increasing their order volumes and negotiating lower, wholesale purchase prices from their suppliers.
The startup’s model incorporates community leaders who work with Tushop to aggregate orders from buyers who typically source food from food markets. Through the leaders, orders are placed directly with suppliers or producers like farmers through Tushop. The community leaders handle the orders and deliveries and can earn a commission for their work.
Group buying like this is unique in Kenya where other eGrocery services have tended to be B2B or don’t enable aggregated purchases.
The big picture
Compared to developed regions, commerce in Africa is still largely informal. The tides are turning, however, with the penetration of the internet and mobile phones on the continent advancing e-commerce across the continent. According to the Economist Intelligence Unit, Africa’s e-commerce market could be worth $75 million by 2025.
Kenya is one of the leaders in e-commerce alongside South Africa and Nigeria, according to the United Nations. And with the center of gravity for Africa’s food systems shifting to urban areas, according to The Africa Agriculture Status Report, eGrocery platforms like Tushop will be increasingly relevant.
By the numbers
Year founded: 2021
Number of employees: 13, according to LinkedIn.
Competitive landscape
Africa has seen a rise in the number of food e-commerce and eGrocery startups over the years, some of which have successfully raised funding this year. They include Cartnshop, MarketForce, Bumpa, Wasoko, ProXalys and TradeDepot to name a few.
