Most large restaurant chains across Africa have grown accustomed to using legacy systems and point-of-sale providers to manage operations. However, for smaller restaurants — which represent the biggest segment of this $50 billion industry — these systems can be rather expensive and do not adequately cater to their needs; thus, they stick with running operations manually.
Orda, a Nigerian food tech platform that provides a cloud-based restaurant operating system to solve these issues for small, independent restaurants, is announcing that it has secured a $3.4 million seed investment. The two-year-old startup raised $1.1 million in pre-seed funding this January, bringing its total funding raised this year to $4.5 million.
Its clients are mostly small and medium-sized restaurants. With limited access to technology, these restaurants typically resort to using offline methods, including pen and paper, for things like manual reconciliation and inventory management. Orda’s operating system allows these businesses to handle these parts of their business online, as well as get access to other features, including kitchen display systems, accounting software and integrations with food aggregators such as YC-backed Chowdeck, Bolt Food and Glovo.
“We take an interesting approach to software and helping restaurant owners set up,” chief executive officer Guy Futi told ProWellTech in an interview. “Our software digitizes the process of those who write things in hand and helps them figure out their inventory management and recipe yields.”
Futi said Orda has witnessed tremendous adoption among small restaurants in its two markets, Nigeria and Kenya, and claims the startup might have reached product-market fit already. His conviction lies in the number of vendors it has pulled in, about 600, and the pace at which the food tech onboarded them, in less than a year.
The chief executive 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 Q1 2022. Orda’s transactions have also increased too. It now processes over 50,000 orders weekly for its vendors, 5x what it recorded as of this January, with its gross merchandise value (GMV) increasing 30% month-on-month. “We’re seeing fast-paced growth in Nigeria and Kenya with a retention rate of above 95%,” Futi added.
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) to access different parts of the software, ranging from order management and an omnichannel to integrations with food aggregators and delivery platforms and setup personnel. Revenue has increased as a result, growing 30% month-on-month, according to Futi.
Despite this growth, building solutions for these African restaurants, especially without a playbook, has come with its fair share of constraints. For instance, Orda has had to configure its cloud-based solution to work offline and let restaurants continue to log data in times when internet access is poor.
Meanwhile, Orda intends to add more functionalities to the platform, particularly around financial products as it looks to power lending and payments for its customers. The platform already processes payments for 10% of its vendors, according to Futi, and might begin a major rollout by Q2 next year.
Building and scaling out its payments feature is one of the food tech’s objectives with this new investment. Others include expanding its network of restaurants and continuing its pan-African expansion drive (into South Africa and much later, Ivory Coast). It has beefed up its leadership team to that effect, bringing personnel: Afu Ahwoihead of operations and strategy (ex-Goldman Sachs) and Modesola Osasomihead of growth (ex-Barclays Bank) for its next growth phase.
Africa’s food tech platforms, despite playing in a nascent ecosystem, are catching the eye of investors these days. In addition to the aforementioned Glovo and Jumia Food, newer upstarts such as Chowdeck and Foodcourt, which help restaurants make online deliveries, have received backing from global investors like Y Combinator, while others like Vendease, OneOrder and TopUp Mama that provide food supplies to restaurants and handle their supply chains have raised significant capital themselves.
Asked whether Orda intends to venture into these other categories, Futi said that such a business decision wouldn’t be ideal as it will veer the startup off its course of building software. “Globally, you see that Sysco isn’t in the same vertical as Toast,” said the founder who launched the startup with Fikayo Akinwale, Mark Edomwande, Kunle Ogungbamila and Namer El-Khouri. “If there’s some sort of collaboration with other players, we’ll be open to that. But from our position, building the right software takes you deep down the rabbit hole and that requires focus.”
Emerging market investor Quona Capital co-led the round with New York-based FinTech Collective. Other investors include existing ones such as LoftyInc Capital, Enza Capital and Norrsken Foundation, as well as new venture capital firms like Outside VC and Far Out Ventures.
Here’s what Kofoworola Agbaje, senior investment associate at Quona Capital, said on why her firm is backing the food tech: “When a restaurant owner moves from pen and paper to a fully automated digital platform, it’s incredibly empowering. Suddenly they have insights available to them that can improve their productivity and margins, enabling them to grow their businesses. A solution like Orda can have an outsized impact on small and medium-sized restaurants and the livelihoods of those who operate them.”