Tushop, the Kenyan-based social commerce platform that enables group shopping for FMCGs, is set to expand in Nairobi after raising $3 million in pre-funding in a round led by 4DX Ventures.
Founded last year by Cathy Chepkemboi, also CEO, Tushop employs community leaders who collect orders from their neighbors while also supporting last-mile delivery.
Each community leader has a virtual store where neighbors place their orders, which Tushop collects from growers or other growers like farmers for bulk orders. Chepkemboy says the plan will save buyers up to 60% even if agents receive a commission on sales.
The startup plans to expand its operations in the Kenyan capital Nairobi and then expand to the rest of the country.
“We will be expanding throughout Nairobi and as it is an operations intensive company we have [immediately] We need more warehouses and vans. We lease and upgrade our technology and our agent channels to make the experience even better,” Chepkemboy told gaming-updates.
The latest round of startups included Jam Fund, Breyer Capital, Chandaria Capital, Teo Ventures, Golden Palm Investments, FirstCheck Africa and DFS Lab. Vasco (formerly Sokovach) also joined the company to make its first strategic institutional investment. Several business angels, including Olugabenga Agbula (UK); Flutterwave CEO Raja Kaul; Eli Pollak, President of the Sundial Group; and Ida Manno, CEO of Apollo Agriculture; Chief Development Officer Chipper Cash also took part in the round.
“We believe the market opportunity for TuShop is incredible and Kathy is the right founder to go for it given her deep understanding of the market and her impressive execution and growth to date. “We are delighted to be partnering with such a strong team of other investors and advisors to help Tushop become a leading group buying player in Africa,” said Peter Orth, Managing Partner of 4DX Ventures.
Experience in the FMCG industry
Chepkemboy launches TuShop after leaving Unilever [Kenya and UK]and a furniture startup in Moko, Kenya. She says that during her time at Unilever Kenya, she was aware of the fragmentation of Kenya’s retail sector, adding that logistics has been one of the main challenges associated with the high cost of essential goods in the country. In Kenya, distributors who buy from manufacturers usually set prices for goods, but they are often inflated by distributors and retailers.
“I was in the area distributing products and I could see what was happening in the area… I could also immediately see that if we were in direct contact with the buyer, the costs would be lower and we could be more targeted in promotion or marketing. So now we buy from manufacturers and sell directly to consumers,” said Chepkemboy, who studied international relations at the University of Pennsylvania.
“We provide predictable delivery of affordable high quality products, including fresh produce. And the only way to do that is to partner with community leaders, collect orders from neighbors, and organize last mile deliveries. Our value proposition here is to provide our customers with a cheap and easy way to shop, we are cheaper than retail,” she says.
Tushop joins a growing list of startups digitizing Kenya’s retail sector. These include Marketforce, whose Rezareza app allows random sellers to order and pay for inventory digitally. Vasco, also located in the same location as Rezareza, operates by distributing FMCG from suppliers to retailers. The difference between the two is that, unlike Vasco, Rezareza is an asset allocation platform – it doesn’t have capital assets like warehouses and vans; They are provided by its partners, including manufacturers and distributors. Tushop is one of the first social commerce platforms in the Kenyan space that buys goods directly from manufacturers and distributes them to buyers.