Most large restaurant chains across Africa have become accustomed to using legacy systems and POS vendors to manage operations. However, for smaller restaurants – which represent the largest segment of this $50 billion industry – these systems can be quite expensive and may not adequately meet their needs; thus, they stick to manually performed operations.
Order, a Nigerian food technology platform that provides a cloud-based restaurant operating system to solve these problems for small independent restaurants, announces that it has secured a seed investment of $3.4 million. The two-year startup raised $1.1 million in pre-seed funding in January, bringing its total funding raised this year to $4.5 million.
Its customers are mainly small and medium-sized restaurants. With limited access to technology, these restaurants typically rely on offline methods, including pen and paper, for things like manual reconciliation and inventory management. Orda’s operating system allows these businesses to manage these parts of their online business, as well as access other features, including kitchen display systems, accounting software, and integrations with food aggregators such as YC-backed Chowdeck, Bolt Food and Glovo.
“We take an interesting approach to software and help restorers get set up,” Managing Director Guy Fouti said TechCrunch in an interview. “Our software digitizes the process of those who write things by hand and helps them understand their inventory management and recipe yields.”
Futi said Orda has witnessed tremendous adoption among small restaurants in its two markets, Nigeria and Kenya, and says the startup may have already achieved product market fit. His belief is in the number of vendors he has attracted, around 600, and the rate at which food tech has taken them on board, in less than a year.
The chief executive said there are “hundreds more” in the pipeline waiting to be onboarded, as Orda plans to serve more than 1,000 restaurants by the end of the first quarter of 2022. ‘Orda also rose. It now processes more than 50,000 orders per week for its suppliers, 5 times what it recorded last January, with its gross market value (GMV) increasing by 30% month-on-month. “We are seeing rapid growth in Nigeria and Kenya with a retention rate of over 95%,” Futi added.
Orda’s pricing model allows restaurants to choose between three payment plans: N1,000 (~$1.54), N5,000 (~$7.69), and N20,000 (~$30.76) to access different parts of the software, ranging from order management to an omnichannel to integrations with food aggregators and delivery platforms and configuration staff. Revenues rose accordingly, rising 30% month-on-month, according to Futi.
Despite this growth, building solutions for these African restaurants, especially without a playbook, has come with its own set of constraints. For example, Orda had to configure its cloud-based solution to work offline and allow restaurants to continue logging data when internet access is poor.
Meanwhile, Orda intends to add more functionality to the platform, particularly around financial products, as it seeks to power loans and payments for its customers. The platform already processes payments for 10% of its vendors, according to Futi, and could begin a major rollout by the second quarter of next year.
Building and expanding its payment functionality is one of food tech’s goals with this new investment. Others include expanding its restaurant network and continuing its pan-African expansion (to South Africa and much later to Ivory Coast). To this end, it has strengthened its management team by bringing in personnel: Afua Ahwoidirector of operations and strategy (ex-Goldman Sachs) and Modesola OsasomiHead of Growth (ex-Barclays Bank) for its next phase of growth.
African food tech platforms, although playing in a nascent ecosystem, are attracting the attention of investors these days. In addition to the above Glovo and Jumia Food, new entrants such as Chowdeck and food courtwhich help restaurants make deliveries online, have received backing from global investors like Y Combinator, while others like VendeaseACommand and Refill The moms who provide food to restaurants and manage their supply chains have themselves raised significant capital.
When asked if Orda intended to venture into those other categories, Futi said such a business move wouldn’t be ideal because it would distract the startup from its software-building trajectory. “Overall, you see Sysco is not in the same vertical as Toast,” said the founder who launched the startup with Fikayo Akinwale, Marc Edomwande, Kunle Ogungbamila and Namir El Khouri. “If there’s some kind of collaboration with other players, we’ll be open to that. But from our perspective, building the right software takes you deep down the rabbit hole and that takes focus.
Emerging markets investor Quona Capital co-led the round with New York-based FinTech Collective. Other investors include existing investors such as LoftyInc Capital, Enza Capital and Norrsken Foundation, as well as new venture capital firms such as Outside VC and Far Out Ventures.
Here’s what Kofoworola Agbaje, Senior Investment Associate at Quona Capital, explains why his firm supports food tech: “When a restaurant owner moves from paper and paper to a fully automated digital platform, it’s incredibly empowering. . Suddenly, they have information that can improve their productivity and margins, enabling them to grow their business. A solution like Orda can have an outsized impact on small and medium restaurants and the livelihoods of those who operate them.