A new Kenyan platform, Tushop – founded in 2021 – has raised $3 Million pre-seed funding in a round led by 4DX ventures with participation from JAM Fund, Breyer Capital, Chandaria Capital, TO Ventures, Golden Palm Investments, FirstCheck Africa, DFS Lab, and Wasoko (formerly Sokowatch)
Tushop says the raised funds will be used in the following ways:
- Growing the team
- Investing in new tech to better the platform and make it as easy to use as possible
- Expanding reach across Nairobi, and to more Kenyan cities.
Tushop approaches commerce in a different way; a community-based way. It works with community leaders to know what different households need and then using the leaders to aid with door to door delivery.
The company says its mission is to make access to groceries more affordable and shopping more convenient for Kenyans and eventually all Africans.
Tushop says community group-buying saves consumers up to 60% on groceries compared to buying in supermarkets, dukas, or at “mama mbogas”, while providing the added convenience of free delivery.
The community leaders who collate orders from their neighbours and manage door-to-door deliveries, not only simplify last mile delivery, they also earn a living and additional income.
Similar community group-buying companies in other markets have achieved significant success, such as Nice Tuan in China and Favo in Brazil.
Tushop says the problems such a model solves in Africa are significant. For example, Kenyans on average spend 46% of their income on food (compared to 6% in America, 22% in China, and 16% in Brazil), and while community group-buying is still nascent, the market has enormous potential: Africans spend $260B yearly on food.
Currently, the status quo is shopping at dukas, “mama mbogas”, supermarkets, open-air markets, or wholesalers, which are often less convenient and more expensive compared to community group-buying.
Wasoko’s participation – their first strategic institutional investment – signals confidence in the team’s ability to capture the group-buying opportunity in Africa. The oversubscribed round included additional participation from a number of angel investors including GB (CEO, Flutterwave), Raja Kaul (President, Sundial Group), Eli Pollak (CEO, Apollo Agriculture), and Ida Mannoh (Director of Growth, Chipper Cash).
What they said:
Commenting on their rapid growth and strong customer retention, Cathy Chepkemboi, Founder & CEO at Tushop, said, “Tushop is unique in this market because we know the customer – we are our own customers! We have grown up experiencing the problem of unaffordable food on the one hand and the need to have additional ‘side hustles’ on the other because of persistently low incomes. We also have first hand experience of the difficulties manufacturers face when moving goods through a fragmented supply chain, which creates distance between them and the customers they serve. We are therefore hyper-focused on delivering a superior experience for suppliers, ‘side-hustling’ Community Leaders, as well as our end-customers in an integrated manner.”
“We are stoked to be working with some of the leading investors globally and locally who really understand the African space from a logistics, tech, and payments perspective, and look forward to justifying their faith in us with future growth, commercial success, and meaningful social impact. Wasoko’s investment in us is also a validating signal of the work we’ve done so far and we look forward to working closely with them to scale Tushop.”
Peter Orth, Managing Partner at 4DX added, “We think that the market opportunity for Tushop is incredibly large, and that Cathy is the right founder to go after it given her deep understanding of the market, and impressive execution and growth thus far. We’re thrilled to join such a strong team of other investors and advisors to help Tushop become the dominant player in group-buying across Africa.”
Daniel Yu, CEO of Wasoko commented, “It has been great witnessing Tushop’s incredible growth, driven by strong leadership and a team that embodies a true understanding of consumers and their communities. We are excited to work with a team that shares our vision of affordability and equitable distribution of goods across Africa.”