November 1, 2021
OP Finnfund Global Impact Fund I invests in food distribution platform Twiga to improve food security across Sub-Saharan Africa
OP Finnfund Global Impact Fund I, the first global emerging markets impact fund in Finland, invests 3 million US dollars in Kenyan headquartered B2B e-commerce food distribution platform Twiga. OP Finnfund Global Impact Fund I joins a group of investors, led by Creadev, in a financing package totalling 50 million US dollars.
Twiga operates a B2B e-commerce system to simplify the supply chain between fresh food producers, FMCG manufacturers and retailers. This removes the need for many intermediaries, significantly lowering the cost of food for consumers.
“Twiga has been bridging the gaps in food and market security since 2014 in Kenya, and with that experience we are ready to expand our offering to East Africa in the coming months and West Africa in 2022”, says Peter Njonjo, CEO and Co-Founder of Twiga. “This financing package helps us to roll out our proven template to other African markets, adapted to the local environment.”
Population growth and urbanisation create major challenges for food security in Africa. Twiga’s approach tackles the inefficiencies in Africa’s domestic food production and distribution ecosystems. Sustainable agriculture is one of the focus sectors for OP Finnfund Global Impact Fund I and previous investments include for example EthioChicken, an Ethiopian poultry company. “We are pleased to contribute to the funding that aims to increase affordable access to food”, says Tuomas Virtala, Head of Asset Management at OP Corporate Bank. “It’s remarkable that Twiga has managed to quadruple its revenue during the COVID pandemic. We believe it shows how viable their business model is.”
Harnessing digital technology for food security
Twiga’s technology is at the heart of the solution to Africa’s lack of affordable access to food. It’s estimated that Africans spend up to ten times more of their disposable income on food compared to developed markets. “Twiga’s mobile-based food supply platform showcases how digital innovations can increase productivity and improve access to products and services”, says Finnfund’s Investment Manager Johanna Raehalme. “Removing inefficiencies in the value chain creates positive change for both vendors, farmers and customers.”
Twiga works with both commercial farmers as well as small-holder farmers and employs over 1,000 people. The company has over 100,000 registered customers for its services across Kenyan cities, delivering over 600 metric tons of product to over 10,000 retailers daily. Twiga empowers a network of mostly female produce vendors to increase sales and profits which makes the investment eligible for the 2X Challenge gender investing initiative. Twiga is also determined to improve the gender balance of its own workforce and there are internal initiatives in place to enhance career paths of women within the organization.
firstname.lastname@example.org, tel. +358 10 252 8719
Valpuri Mäkinen, Communications and Marketing Manager, Finnfund email@example.com, tel. +358 50 384 2105
Johanna Raehalme, Investment Manager, firstname.lastname@example.org, tel. +358 44 033 1110
Twiga is a B2B e-commerce company that aims to modernize Africa’s urban based informal retail through technology to transform the value chain for both fresh produce and manufactured goods. For more information about Twiga visit www.twiga.com
OP Finnfund Global Impact Fund I
OP Finnfund Global Impact Fund I is the first global emerging markets impact fund in Finland. The fund targets significant positive impacts in addition to financial return. The fund raised a total of EUR 135 million. OP Asset Management Ltd, part of OP Financial Group, one of the largest banking groups in Finland, acts as a portfolio manager for the fund and OP Fund Management Company Ltd acts as an alternative investment fund manager of the fund. Finnfund, a Finnish development financier and impact investor acts as an advisor and anchor investor in the fund.
2X Challenge is an international gender lens investing initiative that aims to collectively mobilize USD 15 billion in commitments that provide women in developing country markets with improved access to leadership opportunities, quality employment, finance, enterprise support, and products and services that enhance economic participation and access. Finnfund joined 2X Challenge in 2019.