Kenyan agri marketplace start-up, Tulaa, has partnered with Nigeria-based logistics company, Kobo360, to bring smallholder farmers’ produce from farm to market.
Tulaa sells inputs on credit to small farmers and trades their crop at harvest time by purchasing at farm-gate and delivering to wholesale buyers in urban markets.
“One of the biggest risks we face in getting produce to market is the highly fragmented logistics infrastructure in Kenya,” said Hillary Miller-Wise, Tulaa’s CEO. “Kobo360’s recent entry into the Kenyan market will enable us to mitigate this risk and ensure a great experience for our farmers and buyers.”
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Kobo360 offers an Uber-like service to connect truckers and companies to delivery services. Launched in 2017, Kobo360 has continued to grow its product offerings, VC backing and customer base. The startup claims a fleet of more than 10,000 drivers and trucks operating on its app. In 2019, the company raised a $20 million Series A round led by Goldman Sachs.
Around one-third of food produced for human consumption (or 1.3 billion tonnes) is lost or wasted globally each year, according to the FAO. In Kenya, Sh150 billion worth of food went to waste in 2017, according to the National Bureau of Statistics (KNBS). Tulaa is tackling this problem by sourcing directly from smallholder farmers and ensuring timely delivery to wholesalers in urban markets.
About 25% to 40% of the price that African consumers pay for goods goes to logistics. As a result of fragmented logistics, poor road infrastructure, local cess and corruption, transport costs remain very high throughout Africa, averaging 14% of the value of exports compared to 8.6% for all developing countries.
With the prediction that by 2060, Africa will have a 1.1 billion middle class, the potential is massive for businesses like Tulaa and Kobo360. Food commodities and agri-business will be key drivers as countries move to higher levels of food processing and trade in food products. Transportation of food products in particular hold tantalizing potential and are vital to the growth of the agribusiness sector.
