Social commerce platform Tushop set for Kenyan growth after raising $3 million in pre-seed funding TechCrunch
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-initiation funding in a round led by 4DX Ventures leads.
Founded last year by Cathy ChepkemboiAlso as CEO, Tushop employs community leaders who collect orders from their neighbors and also assist with last-mile deliveries.
Each community leader has a virtual store where neighbors place orders, Tushop aggregates bulk orders for manufacturers or other producers – like farmers. Chepkemboi says the deal saves shoppers up to 60%, even if the dealers collect a sales commission.
The startup plans to grow its business in the Kenyan capital, Nairobi, before expanding to the rest of the country.
“We are going to scale all over Nairobi and because this is an intensive business, we [immediately] need more warehouse and delivery truck. We are hiring and also improving our technology and our agency channels to make the experience even better,” Chepkemboi told TechCrunch.
The startup’s latest round involved JAM Fund, Breyer Capital, Chandaria Capital, TO Ventures, Golden Palm Investments, FirstCheck Africa and DFS Lab. Wasoko (formerly Sokowatch) also joined to make their first strategic institutional investment. Some of the angel investors include Olugbenga Agboola (GB); Flutterwave CEO, Raja Kaul; Sundial Group Chairman, Eli Pollak; Apollo Agriculture CEO, and Ida Mannoh; Chipper Cash Direct Growth, also participated in this round.
“We think the market opportunity for Tushop is immense, and Cathy is the right founder to go in that direction given her deep understanding of the market, as well as her ability to operate and impressive growth to date. We are delighted to join a strong team of investors and other advisors to help make Tushop the dominant player in group buying across Africa,” said 4DX Ventures, managing partner Peter Orth said.
Tupshop is offering group buying in Kenya. Image credits: Tushop
Experience in FMCG industry
Chepkemboi launches Tushop after she leaves Unilever [Kenya and UK], and Moko, a furniture startup in Kenya. She said that it was during her time at Unilever – Kenya that she realized the fragmentation in the retail sector of Kenya, adding that logistics was one of the challenges that led to the high cost of essential commodities in the country. In Kenya, distributors sourcing from manufacturers often determine the price of goods, however, this price is often inflated by distributors and retailers.
“I work in product distribution and can see what happens in the real world… I can also say right away that if we were in direct contact with the customer, the costs would be lower and us can do more targeted marketing or promotions. This led to what we are doing now, sourcing from manufacturers and selling directly to consumers,” said Chepkemboi, who studies international relations at the University of Pennsylvania.
“We provide predictive delivery of high quality merchandise at affordable prices, including fresh produce. And the way we can do this is by working with community leaders who collect orders from neighbors and manage last-mile deliveries. Our value proposition here is to provide our customers with a cheaper and more convenient way to shop. We’re cheaper than retail,” she said.
Tushop joins the growing list of startups that are digitizing the retail sector in Kenya. They include Marketforce, yes Application RejaReja enables informal sellers to order and pay for inventory digitally. Wasoko, also in the same industry as RejaReja, operates by distributing FMCG from suppliers to retailers. The difference between the two is that RejaReja, unlike Wasoko, is a lightweight asset delivery platform – it does not own capital assets like warehouses and delivery trucks; they are offered by its partners including manufacturers and distributors. Tushop is one of the first social commerce platforms in Kenya, sourcing directly from manufacturers and shipping to buyers.
