Tushopa social commerce platform in Kenya that enables group buying of fast-moving consumer goods (FMCGs) is set to expand across Nairobi after raising $3 million in pre-seed funding in a round led by 4DX Ventures.
Founded last year by Cathy Chepkemboialso the CEO, Tushop employs community leaders who collect orders from their neighbors and also support last mile deliveries.
Each community leader has a virtual store where neighbors place their orders, which Tushop aggregates for bulk orders to manufacturers or other producers — like farmers. Chepkemboi says this arrangement saves buyers up to 60%, even as agents earn sales commissions.
The startup plans to expand its business in Kenya’s capital, Nairobi, before expanding to the rest of the country.
“We will scale across Nairobi and as it is an operationally intensive business we will [immediately] need more warehouse and delivery truck. We’re hiring and also improving our technology and our agents’ channels to make the experience even better,” Chepkemboi told TechCrunch.
JAM Fund, Breyer Capital, Chandaria Capital, TO Ventures, Golden Palm Investments, FirstCheck Africa and DFS Lab participated in the startup’s latest round. Wasoko (formerly Sokowatch) also joined to make her first strategic institutional investment. A number of angel investors including Olugbenga Agboola (UK); Flutterwave CEO Raja Kaul; Eli Pollak, President of Sundial Group; CEO of Apollo Agriculture and Ida Mannoh; Chipper Cash Directo of Growth also participated in the round.
“We believe the market opportunity for Tushop is incredibly large and that Cathy is the right founder to pursue due to her deep understanding of the market and her impressive execution and growth to date. We are excited to join such a strong team of fellow investors and advisors to help Tushop become the dominant player in group buying across Africa,” said Peter Orth, Managing Partner of 4DX Ventures.
FMCG industry experience
Chepkemboi founded Tushop after leaving Unilever [Kenya and UK], and Moko, a furniture startup in Kenya. She says that during her time at Unilever – Kenya she recognized the fragmentation of Kenya’s retail sector, adding that logistics is one of the challenges that has led to the high cost of essential goods in the country. In Kenya, traders who source from manufacturers generally set the price of goods, which is often inflated by the traders and retailers.
“I was out in the field selling products and I could see what was happening on the ground… I could also immediately see that if we were in direct contact with the customer, the costs would be lower and we could do more targeted promotions or marketing. This led to what we’re doing now, sourcing from manufacturers and selling directly to consumers,” said Chepkemboi, who studied international relations at the University of Pennsylvania.
“We offer forward-thinking delivery of affordable, high-quality goods, including fresh produce. And we can achieve this by working with community leaders who collect orders from neighbors and manage last-mile delivery. Our value proposition here is to offer our customers a way to shop more cheaply and conveniently. We’re cheaper than retail,” she said.
Tushop joins the growing list of startups digitizing the retail sector in Kenya. This includes Marketforce, whose RejaReja app enables informal traders to order and pay for inventory digitally. Wasoko, also in the same space as RejaReja, distributes FMCG from suppliers to retailers. The difference between the two is that unlike Wasoko, RejaReja is an asset-light distribution platform – it does not own capital assets such as warehouses and delivery trucks; These are provided by its partners, including manufacturers and retailers. Tushop is one of the first social commerce platforms in Kenya, sourcing goods, including fresh produce, directly from producers and delivering them to buyers.
Social commerce platform Tushop set for Kenya growth after raising $3 million pre-seed funding – TechCrunch Source link Social commerce platform Tushop set for Kenya growth after raising $3 million pre-seed funding – TechCrunch