DOB Equity together with Elea Foundation and A to Z Impact have invested undisclosed amount in Kwanza Tukule, a Nairobi-based last-mile distribution business that supplies informal food vendors with staple foods to cook meals for their customers.
Kwanza Tukule was founded in 2019 by Khadija Mohamed Churchill after she identified an opportunity to create a more efficient last-mile distribution system for the informal vendors based in densely populated areas in Nairobi. The total number of food vendors in Nairobi is estimated to be around 50,000 and this is the market Kwanza Tukule is tapping into.
Khadija Mohamed Churchill, founder and CEO of Kwanza Tukule said “We are a cashless, B2B business using technology to ensure there is accessible, affordable and nutritious food for the many people that work and live in low-income areas in Kenya. People living in urban centers in Kenya get 33% of their nutritional intake from street food. For low-income neighbourhoods more than 40% of households consume street food and 80% of the food vendors are women.”
Why DOB Invested in Kwanza Tukule
Saskia van der Mast, Co-CEO of Dutch private equity firm DOB Equity said “We are excited by Kwanza Tukule and its team led by a strong, local and female CEO. The company is addressing key issues of some of the most marginalized communities in urban settlements. Kwanza Tukule has achieved considerable growth in its first year of operations and a loyal customer base.”
It is estimated that 25% of Kenya’s population lives in cities. That is expected to rapidly increase to 40% in 2040. Most of the urban population live in informal settlements – these areas are cut-off from modern and efficient food supply chains. Informal food vendors and dukas (small retail shops) have filled this gap, providing access to low-cost food to the people living in these settlements.
Many lack kitchens and the money for proper cooking equipment and face long commutes to work. They therefore depend on street food vendors for affordable and accessible meals. Estimates suggest that residents of informal settlements in Nairobi consume street food on average four times a week. Despite their importance in feeding a significant part of the city’s population, informal food vendors face difficult operating conditions. These include expensive and unreliable supplies and limited economies of scale.
Maina Murage, Investment Professional at DOB said: “An investment in Kwanza Tukule expands our portfolio of food distribution and logistics in East Africa. DOB was among the first institutional investors in Twiga Foods in 2016”. Food security in urban areas where people can spend more than 50% of household income on food is an area of interest for DOB Equity.
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