Most major restaurant chains across Africa have become accustomed to using outdated systems and point of sale providers to manage their operations. However, for smaller restaurants – which represent the largest segment of this $50 billion industry – these systems can be quite expensive and not adequately meet their needs; so they stick to doing edits manually.
order, a Nigerian food tech 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-old startup raised $1.1 million in pre-seed funding in January, bringing total funding to $4.5 million this year.
Its customers are mostly small and medium-sized restaurants. With limited access to technology, these restaurants usually resort to using offline methods, including pen and paper, for things like manual reconciliation and inventory management. Orda’s operating system allows these companies to handle these parts of their business online and access other features including kitchen display systems, accounting software and integrations with food aggregators such as YC-backed Chowdeck, Bolt Food and Glovo.
“We have an interesting approach to software and helping restaurant owners set up,” CEO Guy Futi londonbusinessblog.com said in an interview. “Our software digitizes the process of those who write things by hand and helps them track their inventory management and prescription yields.”
Futi said Orda has witnessed massive adoption by small restaurants in its two markets, Nigeria and Kenya, claiming the startup may already be fit for the product market. Its conviction lies in the number of suppliers it has brought in, about 600, and the pace at which the food tech has brought them on board in less than a year.
The CEO 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’s transactions have also increased. It now processes more than 50,000 orders for its suppliers each week, 5x as many as in January, with gross commercial value (GMV) growing 30% month-over-month. “We are seeing rapid growth in Nigeria and Kenya with retention rates above 95%,” added Futi.
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) for access to different parts of the software, ranging from order management and an omnichannel to integrations with food aggregators and delivery platforms and installation personnel. Sales have increased as a result, growing 30% month-on-month, according to Futi.
Despite this growth, building solutions for these African restaurants, especially without a script, comes with quite a few limitations. For example, Orda has had to configure its cloud-based solution to work offline and allow restaurants to continue logging data during times when internet access is poor.
Meanwhile, Orda plans to add more functionality to the platform, particularly around financial products, as it aims to boost lending and payments for its customers. The platform already processes payments for 10% of its suppliers, according to Futi, and could begin a major rollout in Q2 next year.
Expanding and expanding the payment function is one of the goals of the food tech with this new investment. Others include expanding its network of restaurants and continuing its pan-African expansion drive (to South Africa and much later Ivory Coast). It has strengthened its leadership team to this end, with staff: Afua Ahwoichief of operations and strategy (ex-Goldman Sachs) and Modesol Osasomihead of growth (ex-Barclays Bank) for the next growth phase.
Despite playing in an emerging ecosystem, the African food tech platforms are now attracting the attention of investors. In addition to the aforementioned Glovo and Jumia Food, newer upstarts such as Chowdeck and Foodcourt, which help restaurants deliver online, have gained backing from global investors such as Y Combinator, while others such as Vendease, OneOrder, and TopUp Mama who provide food to restaurants and their supply chains manage, have themselves raised significant capital.
When asked if Orda plans to venture into these other categories, Futi said such a business decision wouldn’t be ideal, as it would divert the start-up from its software-building course. “Worldwide you see that Sysco is not in the same industry as Toast,” says the founder who launched the startup with Fikayo Akinwale, Mark Edomwande, Kunle Ogungbamila and Namir El Khouri. “If there is any kind of collaboration with other players, we are open to it. But from our position, building the right software takes you deep down the rabbit hole and that requires focus.”
Emerging markets investor Quona Capital led the round along 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 officer at Quona Capital, said about why her company is supporting food technology: “When a restaurant owner moves from pen and paper to a fully automated digital platform, it’s incredibly empowering. Suddenly they have insights at their disposal that can improve their productivity and margins, helping them grow their business. A solution like Orda can have a huge impact on small and medium-sized restaurants and the livelihoods of those who operate them.”