KENYA – Goldman Sachs, American multinational investment bank has acquired stake in Kenyan-based technology food distribution platform Twiga Foods, following a Sh2.44 billion (US$23.75 million) deal aimed to widen its footprint in Kenya and Africa.

Marking Goldman Sachs’ first major deal in Kenya, it will provide funding to the start-up together with three other Twiga Foods existing investors i.e. International Finance Corporation (IFC), venture capital firm, TLCom Capital, and French private equity fund Creadev.

“Goldman Sachs is getting a stake and it will be the lead institutional investor in Twiga. It is providing the bulk of the $23.75 million, said Peter Njonjo, the company’s CEO

“This funding will enable us to invest in our technology and organisation to tackle the inefficiencies in Africa’s domestic food production and distribution,” he added.

Goldman Sachs reckons that food distribution will be big business in Africa given that its population is set to double over the next three decades, creating the need for affordable food sources and guaranteed markets for farmers.

“We are delighted to be backing Peter and the highly capable team as they scale operations and drive sustainable access to lower quality food on the continent,” said Jules Frebault, the Africa head at Goldman Sachs in a statement.

In addition to the deal, Twiga Foods has also received a financing debt of KSh618 million (US$6 million) from the Overseas Private Investment Corporation (Opic) and the Switzerland-based AlphaMundi, which specialises in impact investing.

The new round of equity funding classified as a Series B round will enable the B2B company, set up a distribution center in Nairobi and deepen its conversion to offering supply chain services for both agricultural and FMCG products.

The Nairobi based company will invest in expanding into more cities in Kenya, including Mombasa. Twiga is also targeting Pan-African expansion by third quarter 2020.

Its previous financing in December 2018 saw IFC and TLcom Capital inject US$10.3 million into the start-up.

Others that participated in the round of capital included previous investors Wamda Capital, DOB Equity, 1776 and Adolph H. Lundin.

Mid this year Creadev acquired an undisclosed stake worth US$5 million (Sh500 million) at the company.