Nigerian profitable food delivery Chowdeck lands $9M from Novastar, Y Combinator

Chowdeck, a food delivery startup based in Lagos, has successfully raised $9 million in Series A funding, positioning itself for rapid growth in a challenging and low-margin industry. The financing round, led by Novastar Ventures and featuring contributions from Y Combinator, AAIC Investment, Rebel Fund, GFR Fund, and others, will enable Chowdeck to enhance its quick commerce strategy and broaden its reach in Nigeria and Ghana. CEO and co-founder Femi Aluko expressed excitement about the funding, stating that it will accelerate their mission to become the leading super app in Africa. The investment is expected to facilitate expansion into new cities, improve delivery times, and enhance the company's grocery services while attracting top talent to innovate and enhance customer satisfaction. Since its inception in October 2021, Chowdeck has made significant strides, now operating in 11 cities and serving 1.5 million customers through a network of over 20,000 riders. The startup has maintained an impressive average delivery time of 30 minutes per order, with a notable portion of deliveries made via bicycle in densely populated areas. While many competitors have retreated from the African market, Chowdeck has focused on delivering local cuisine, building a strong rapport with its user base. In 2024, the company recorded a remarkable sixfold increase in meal delivery value compared to the previous year, already surpassing its annual target by mid-July. The new funding will enable the rollout of ultra-fast delivery through a network of dark stores and hyperlocal logistics hubs, with plans to establish 40 such stores by the end of the year and 500 by 2026. Chowdeck's business model contrasts with the challenges faced by quick commerce companies globally, which have often struggled to achieve profitability. Unlike many in the industry, Chowdeck has remained profitable since before this funding round, showcasing a commitment to entering new markets only when they can achieve break-even status quickly. For instance, after launching in Ghana in May, the company was processing 1,000 daily orders within three months without relying on paid promotions. To further support its operations, Chowdeck recently acquired Mira, a point-of-sale provider that empowers African food and hospitality businesses with real-time inventory and order management tools. This acquisition positions Chowdeck as a logistics and software provider, enhancing its service offerings in the restaurant sector. Chowdeck’s successful funding round represents a significant opportunity for local players in the food delivery market, especially following Jumia's exit, which left room for foreign competitors like Glovo and Bolt Food. Despite some foreign companies pulling out of certain markets, Chowdeck is aggressively targeting Nigeria and Ghana. Aluko noted that consumer behavior is shifting online, with a new generation ordering food without ever visiting traditional restaurants or markets. Lead investor Brian Waswani Odhiambo from Novastar Ventures emphasized the importance of local insight and execution in Chowdeck's strategy, stating, "Chowdeck is building the future of logistics for African cities, redefining last-mile delivery on the continent."