The Next Wave: The expensive life of Twiga Foods

Twiga Foods, a venture-backed food logistics company in Kenya, aimed to modernise the informal economy by integrating technology into the supply chain. The platform, which raised approximately $185.4 million in funding from notable investors, processed up to 12,000 deliveries daily in twelve cities, serving 140,000 retailers and handling two million kilograms of produce. However, the company never turned a profit, despite twelve years of operation.

The informal food logistics system in Nairobi is efficient, with minimal overheads and zero fixed costs. Traditional brokers, who make up a large portion of the supply chain, lack the resources to lease cold-storage depots, develop software, or maintain corporate governance. When Twiga introduced its cold-chain staging and enterprise routing software, the overheads increased beyond the gross margin between farm-gate wholesale and street-corner retail.

Twiga attempted to address this issue by launching Twiga Fresh, a commercial farming subsidiary in 2022, investing $10 million to cultivate onions, tomatoes, and watermelons. However, the company faced numerous challenges, such as weather variability, pests, and high direct labour costs. Additionally, Twiga committed resources to a central fulfillment centre in the Tatu City Special Economic Zone, which became an onerous liability due to unpaid rent.

The venture's failure to raise further funding, coupled with rising operational costs, contributed to its eventual liquidation under Kenya's Insolvency Act in August and September 2026. The story of Twiga Foods showcases the difficulties companies face when attempting to disrupt and improve upon entrenched industries, particularly when relying heavily on funding and technology to navigate complex supply chains.