Kenyan social-commerce startup Tushop, which enables communities in Nairobi to buy groceries more cheaply with free delivery, recently announced closing $3M in a pre-seed funding round led by 4DX Ventures.
The round saw the participation of JAM Fund, Breyer Capital, Chandaria Capital, TO Ventures, Golden Palm Investments, FirstCheck Africa, and DFS Lab. Kenyan retail-tech startup Wasoko (formerly Sokowatch) also joined, making its first strategic institutional investment into Tushop. The oversubscribed round included additional participation from several angel investors, including Olugbenga “GB” Agboola (Flutterwave CEO), Raja Kaul (Sundial Group president), Eli Pollak (Apollo Agriculture CEO), and Ida Mannoh (Chipper Cash director of growth).
According to the startup, the funds will be deployed to expand its team, invest in technology to make its platform as user-friendly as possible, and expand across Nairobi before rolling out the service to other Kenyan cities.
Tushop – Making Shopping More Affordable with Group-Buying
Founded in 2021 by Cathy Chepkemboi, Tushop aims to make access to groceries more affordable and more convenient for Kenyans and eventually all Africans. 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.
Tushop collaborates with “community leaders,” who gather their neighbours’ orders and coordinate door-to-door deliveries. This facilitates last-mile delivery and provides additional income for community leaders who coordinate and deliver orders.
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In Africa, the difficulties that this model tackles are significant. Kenyans, for example, spend 46% of their income on food (compared to 6% in the United States, 22% in China, and 16% in Brazil), and while community group-buying is still in its infancy, the market has immense potential: Africans spend $260 billion on food each year. Shopping at dukas, “mama mbogas,” supermarkets, open-air marketplaces, or wholesalers is currently the norm, but it is typically less convenient and more expensive than community group-buying.
Tushop’s Rapid Growth
Tushop’s Founder and CEO, Cathy Chepkemboi, commented on the company’s rapid growth and good customer retention, saying — “Tushop is unique in this market because we know the customer – we are our own customers! On the one hand, we have grown up experiencing the problem of unaffordable food 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. Therefore, we are hyper-focused on delivering a superior experience for suppliers, ‘side-hustling’ Community Leaders, and our end-customers in an integrated manner.”
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“We are stoked to be working with some of the leading investors globally and locally who understand the African space from a logistics, tech, and payments perspective and look forward to justifying their faith in us with future growth and commercial success 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,” he added.
Comments From Their Partners
Managing Partner at 4DX, Peter Orth, revealed that — “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.”
