Chowdeck Secures $9M Funding for Nigerian Food Delivery

Chowdeck Secures $9 Million Series A Funding for Expansion

Chowdeck, a food delivery startup based in Lagos, Nigeria, has successfully secured $9 million in Series A funding. This achievement is particularly notable given the challenging and often low-margin nature of the food delivery market.

The funding round was spearheaded by Novastar Ventures, with significant contributions from Y Combinator, AAIC Investment, Rebel Fund, GFR Fund, Kaleo, HoaQ, and other investors. These firms are demonstrating confidence in the company’s capacity to leverage its understanding of the local market and operational efficiency.

Plans for Growth and Quick Commerce

“This funding brings us significantly closer to realizing our ambition of becoming Africa’s leading super app,” stated Femi Aluko, CEO and co-founder of Chowdeck. “We intend to utilize these resources to broaden our reach into new cities, accelerate delivery speeds, enhance our grocery offerings, and attract top-tier talent.”

Established in October 2021 by Aluko, Olumide Ojo, and Lanre Yusuf, Chowdeck currently serves 1.5 million customers across 11 cities in Nigeria and Ghana. The company boasts a network of over 20,000 riders, achieving an average delivery time of 30 minutes per order.

Navigating a Competitive Landscape

While several major competitors have either exited the African market or reduced their operations, Chowdeck has distinguished itself by focusing on the intricacies of local markets. The company prioritizes delivering locally-sourced meals, a more complex logistical undertaking, to foster customer loyalty.

The volume of meals delivered via Chowdeck increased more than sixfold in 2024 compared to the previous year. Remarkably, the company has already surpassed its 2024 delivery totals before the end of July.

Expansion into Quick Commerce and Dark Stores

The newly acquired funding will facilitate Chowdeck’s entry into the quick commerce sector, characterized by ultra-fast delivery services. This will be supported by a network of dark stores and strategically located hyperlocal logistics hubs.

The company’s plans include the opening of 40 dark stores by the close of this year, with an ambitious goal of reaching 500 stores by the end of 2026, launching two to three new locations each week. Chowdeck previously raised $2.5 million in a seed funding round last year.

Profitability and Market Strategy

Food delivery remains a highly competitive industry globally, though successful implementations, such as DoorDash, have yielded substantial results.

Quick commerce, however, has proven to be a capital-intensive venture in many markets. European companies like Gorillas and Getir experienced significant financial losses before restructuring or merging. In India, platforms like Blinkit, Zepto, and Swiggy have achieved varying degrees of profitability with this model.

Chowdeck has maintained profitability prior to this funding round, and Aluko emphasizes the company’s commitment to achieving break-even within weeks of entering new cities or expanding into new service categories.

For example, upon entering Ghana in May, Chowdeck processed 1,000 daily orders within three months without utilizing paid advertising. This success, according to Aluko, reflects a strong, unmet demand for a service offering both local and international cuisine.

Vertical Integration with Software Acquisition

Chowdeck intends to replicate this successful strategy with its dark store rollout, complementing its existing restaurant and grocery delivery services.

Further diversifying its operations, Chowdeck acquired Mira, a point-of-sale (POS) provider for African food and hospitality businesses, in June. Mira’s real-time inventory and order management tools will now be integrated with Chowdeck’s operations, positioning the company as a vertical SaaS provider combined with logistics for restaurants.

A Win for Local Players

Chowdeck’s funding represents a significant win for local companies in the sector, particularly following Jumia’s departure, which created opportunities for international brands like Glovo, Bolt Food, and Yango. However, some of these international competitors have also withdrawn from markets like Nigeria and Ghana, creating a favorable environment for Chowdeck’s aggressive expansion.

Other local companies offering food delivery services in various African markets include Gozem, YC-backed Yassir, and MNT-Halan.

Looking Ahead

“The market is still in its nascent stages,” Aluko noted. “We are witnessing a fundamental shift in consumer behavior, with a growing number of customers embracing online ordering for the first time. An entire generation is now accustomed to ordering food without physically visiting restaurants or markets.”

Brian Waswani Odhiambo, partner at Novastar Ventures, highlighted the firm’s confidence in Chowdeck’s execution and local expertise. “Chowdeck is pioneering the future of logistics in African cities,” he stated. “Its deep understanding of the local market, commitment to sustainability, and impressive operational capabilities are redefining last-mile delivery across the continent.”

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