Online food mart, Vendease secures $3.2m seed fund to deepen its credit services

Nigerian food technology company, Vendease has announced the closure of a $3.2m seed funding round.

The round was led by San Francisco-based venture capital firm Global Founders Capital. Other participants include Y Combinator, Hustle Fund, Liquid 2 Ventures, Hack VC, Soma Capital and Magic Fund. Angel investors such as Paga CEO, Tayo Oviosu and Remita CEO, John Obaro also contributed to the round.

VendEase is an online marketplace that lets restaurants and other businesses involved in the food industry in Africa, order directly from farms and food manufacturers. With Vendease, food service business owners and managers can digitally track and automate their procurement and inventory management processes.

Vendease also provides businesses with analytics to improve profitability and eliminate waste. In addition, the startup has a warehouse for adequate storage and logistics services to ensure prompt delivery.

Founded in January 2020 by Tunde Kara, Olumide Fayankin, Wale Oyepeju and Olumide Fayankin, Vendease has moved 100,000 metric tonnes of food, processed $12.9 million in transactions and has made $1.2 million in annual recurring revenue.

Speaking on the investment, the managing partner at Global Founders Capital mentioned the team’s excellence and growth opportunities.

“As a backer of one of Africa’s very first unicorns, Jumia, we’ve seen a great deal of talent in the market – and Tunde & the Vendease team are best in class both in EMEA and globally. Their laser focus and rapid growth are unprecedented, and there’s a massive opportunity ahead.”

Oliver Samwer, Managing partner, Global Founders Capital

Vendease Operations

Nigeria has one of the highest inflation rates in the world. Between September 2020 and September 2021, cost of food in Nigeria has increased by 19.57 per cent.

To combat the inflation rates, the startup uses a predictive analysis and storage system to help businesses predict future food prices, store food in advance, and peg their prices for any duration depending on the food category.

Vendease currently operates in three Nigerian cities — Lagos, Abuja and Ibadan, with some of the biggest food brands in the country such as Hard Rock, Krispy Kreme and Shiro.

When a restaurant or food business places an order, the system generates all the possible suppliers that can fulfil it. It then looks at the best pricing versus quality and assigns that order to the supplier. According to the company, delivery is made within 24 hours, either by itself or third-party logistics providers.

According to the CEO, Tunde Kara, the company will use the funding to expand into other cities and countries before the end of the first quarter of next year.

Furthermore, the funding will be used to improve the startup’s technology stack and to secure partnerships with some payment platforms and banks to deepen its financial products, especially credit services.