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Goldman supported Jumia and Twiga's production partners in Kenya

Image:-Credits: Jumia

During COVID-19, pan-African e-commerce company Jumia and B2B agtech startup Twiga Foods are partnering to deliver products in Kenya using adaptive measures.

In 2019 Jumia became Africa's first VC-funded tech company to be listed on a major exchange, the NYSE. In October, Twiga, based in Nairobi, raised a $30 million Series B round, and announced plans to expand its food supply chain business to West Africa.

Both companies are backed by U.S. investment bank Goldman Sachs' venture capital.

Jumia will sell bundles of Twiga's fresh produce via the partnership on its e-commerce website. Jumia's delivery fleet will pick up orders from Twiga's sorting and distribution centers and then complete last mile, contact the delivery free of charge. According to Jumia Kenya CEO Sam Chappatte, the transactions will be cash only through Jumia's JumiaPay app.

The arrangement is intended to leverage both companies' strengths, while providing households with a safer and more affordable way of obtaining food through the coronavirus crisis that hit East Africa last month.

Co-founded by Peter Njonjo and Grant Brooke in Nairobi in 2014, Twiga Foods focuses primarily on connecting Kenya's farmers' produce more effectively to pricing and marketplaces. Through a network of 17,000 farmers and 8,000 vendors the company serves around 3,000 outlets a day with produce.

According to Jumia's Kenya CEO, Twiga will benefit from Jumia's B2C e-commerce platform, and Twiga from Jumia's B2B producing network.

On the product offerings, "We pulled the core basics together that a family would need for a week or two weeks," Chappatte told TechCrunch on a Nairobi call.

"Those are 28 kg of fruit and vegetables. It's delivered in an hour and a half, saving 50 per cent against supermarkets.

The partnership comes as the coronavirus hit Africa, and tech ecosystem actors across the continent have begun developing practices to maintain operations and stem the spread.

By WHO stats Tuesday there were 21,388 COVID-19 cases in Africa and 877 confirmed deaths related to viruses, up from 345 cases on March 18 and 7 deaths. Kenya ranks 13th on the continent in cases involving coronavirus.

Countries like South Africa, Kenya and Nigeria - which happen to be the top tech hubs in Africa - imposed social distance and lockdown practices.

Chappatte believes the virus is probably undercounted in Kenya. From two angles, Jumia approaches what could become a worsening COVID-19 scenario in Kenya.

"One of the ways we're facing the crisis and trying to be as useful to our communities as possible is to remain a daily service," he said.

"The second piece is about the right to operate... engaging the government on how cashless, contactless and safe home delivery can be, and therefore a useful service over this period." Like many tech ventures in Africa, Jumia needs to adapt to the coronavirus' health and economic realities to continue generating revenue. The company has faced increased pressure to demonstrate profitability since going public in April 2019 - and being required to report quarterly financial performance.

Continued losses, a short-sell assault and an employee fraud scandal in 2019 led to Jumia's share price plummeting more than 50 percent since its April IPO, from $14.50 on the listing to $4.43 as of Monday.

The company weathered those events and in the results of 2019, CEO Sacha Poignonnec highlighted a bright spot. Jumia finally came into the black on one key indicator, reaching a €1.0 million gross profit after deducting fulfillment expenses in Q4 of last year.

The next earnings call from the online retailer is scheduled for May 13th. It could provide a unique window into the extent to which COVID-19 has impacted the performance of one of the most visible tech companies on the continent in Africa.