Photo credit: Orda Africa

WHY WE INVESTED

The cloud-based POS startup helping food service businesses in Africa grow

Orda puts data and insights into the hands of food merchants that most need them

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For Nigerian and Kenyan food establishment managers like Abimbola Lawal, working long hours managing restaurants is a fact of life.

Amid the frantic day-to-day pace of running O’John Cuisine’s two locations in Lagos, Lawal is tasked with keeping track of sales and inventory — no simple feat for a small business that serves a wide variety of delicacies, from shawarma to waffles to spaghetti and ice cream.

The only tools at her disposal? A notebook, a pile of sales receipts, and her cash register. She ends each exhausting day by tallying up her sales, which can take upwards of an hour.

Serving a largely underserved segment of the restaurant industry

Lawal’s situation as a restaurant manager in Nigeria is not unique. More than 1.5 million African food business owners and managers still use pen and paper to run their establishments.

Yet food and agriculture is a massive part of Nigeria’s economy. The average Nigerian spends 55% of their income on food, and 45% on all other non-food items combined.

And while the country’s food services industry is massive and ever-expanding — worth an estimated $7 billion, with the quick service restaurants (QSR) section growing at an annual average of 25% — small vendors such O’John Cuisine have long been overlooked and underserved.

These independent businesses were hit hard by the onslaught of challenges spurred by the COVID-19 pandemic — restrictions on movement, lockdown, and social distancing protocols.

To add to the fire, small food vendors already grapple with the routine struggles of managing inventory, controlling for losses and theft — not to mention the financial challenges inherent in most restaurant businesses, such as lack of access to credit and lending.

Creating solutions

Guy Futi is dead set on solving these problems. When Futi was managing director of on-demand logistics for Jumia, Nigeria’s food delivery and ordering platform, he interfaced with a lot of restaurant managers and owners.

“I really got to see this buoyant part of the African economy, and how critical food, agriculture and eating is such a key part of culture,” says Futi, CEO and co-founder of Orda Africa. “And I really wanted to get to the root of the problem these businesses were experiencing — the lack of software.”

Futi realized that there was a deep need to put digital tools into the hands of small- and medium-sized restaurant owners. “I figured I could solve it, otherwise someone else was going to come and do it. It was only a matter of time, so why not be me?” he says.

Getting digital tools to food business owners who most need them

Futi’s cloud-based startup, Orda, acts as a one-stop point of sale (POS) platform to help independent food service businesses grow. With inventory management and marketplace integrations combined with online communication and ordering channels that include WhatsApp, Glovo, and Bolt, Orda provides the digital tools for restaurants to trim down waste and control for theft and loss — while enabling them to easily take advantage of digital ordering channels.

About 70% of the restaurants Orda serves have an average order size that falls below $4.80. Before Orda, these largely underserved businesses lacked access to a platform.

And since Orda’s all-in-one platform was built and tailored for the small but mighty businesses, food service establishments have been able to integrate these digital tools into their operations, in the process tapping into insights that can boost productivity, profit margins, and expand their operations.

The reluctant leap to entrepreneurship

Interestingly, Futi’s decision to found a startup was a reluctant one. “Having a 9 to 5 and getting paid pretty well wasn’t that bad,” laughs Futi. “I had sworn off entrepreneurship — too many long hours and risk — I found that I really, really wanted to do this.

“I wasn’t really trying to aggressively raise for it, it began as just a side project with a bunch of friends,” continues Futi. “And then I just kept seeing that the lack of tech is really the problem. So that’s what kept me going.”

While Futi was slow to jump feet-first into the founder pool, he is no stranger to getting startups off the ground. Before his post at Jumia, Futi, 39, who was born in Congo and moved to Canada with his family at a young age, put on his entrepreneurial hat in a series of roles. The first was by launching a social impact business that sold beverages and embarked on social missions in the Congo, Nicaragua and Uganda — “think: Tom’s Shoes meets water,” he says.

It was when Futi worked with Nigerian founders in helping them build their startups that the country captured his heart. “It’s just this massive land with dynamic people — the electric nature of people and all the organized chaos and potential,” says Futi. “Nigeria just really gripped me, and I decided to build African-centric endeavors.”

The power of data

The fact that Orda boasts a 91% retention rate is proof of its deep, enduring commitment to serving its food business owners. “What has been compelling for me and my team is that over half of the restaurants that we visit have never had software before,” says Futi.

Besides getting the platform implemented into more small restaurant vendors, the Orda team is devoted to helping expand their businesses through the power of information. “The focus is getting the software into their hands, and helping them grow with data, insights, credit, and lending,” says Futi.

Orda puts day-to-day insights at the fingertips of everyday restaurant owners, including things like daily performance reports, that reveal growth stemming from selling more chicken. And better inventory management tools enable restaurants to turn a greater profit while selling less.

Busy managers like Lawal can, at a glance, see the exact number of customers in a given day. And the hour she used to spend tallying up her daily sales? It’s now down to a matter of minutes, giving her more time to sit and enjoy meals and social time with her own family.

Getting to the heart of customers’ needs

Today Orda serves over 600 restaurants and food businesses in Nigeria. But it doesn’t simply provide the software and hand it off to its customers. Instead, Orda’s team cultivates a partnership with its client base.

The startup is deeply involved and invested in understanding and engaging with the small vendors they work with. This typically means a two-week training period, and receiving constant feedback on its platform and features.

“We’re still in that phase where we’re still talking to every single restaurant, we’re still going door to door, we’re still knocking,” says Futi. “Our tech team is still taking feedback: How are our colors? Are our buttons good enough?”

Each business with an Orda account is assigned a rep they can reach out with questions or if they’re faced with a challenge. For restaurant managers such as Lawal of O’ John Cuisine, having a reliable go-to person to help her with her needs has been a game-changer. “You call her [my rep] anytime she’s there, and she will call me back,” says Lawal. “She’s a wonderful person.”

Orda is also focused on dealing with the peculiarities and hiccups that food service businesses have to deal with, such as limited or intermittent internet connectivity. Orda’s capabilities include the ability to operate within these constraints.

Power in numbers

Another significant challenge Orda is helping Nigerian restaurant owners with is navigating rising food costs and overall costs of living.

Case in point: The annual inflation rate in the country has skyrocketed for six straight months to a staggering 19.64% in July 2022, the highest rate since January 2017. Looking at food alone, in June 2022, the average price tag for one kilogram of beans spiked 24.17% on a year-over-year basis.

To insulate restaurant operators’ bottom lines from these rising costs, Orda is working to implement bulk-buying as a collective of restaurants. “It’s a challenge that also serves as an opportunity for us to come in and help them,” says Futi.

Greater access to lending opportunities

It’s no surprise that lack of credit and lending opportunities stands in the way of a restaurant’s growth.

Orda is also working on a feature to extend credit and lending opportunities to its customers and provide pre-approval offers through a portal on its platform. This would be based on a business’s volume, transactions, and days they’re open, explains Futi. “This feature is sorely needed in a space and industry where access to credit is lacking,” he says.

Continual expansion

The demand for Orda’s platform is obvious — and ever-expanding. Orda has witnessed a 15% week-on-week growth in gross merchandise volume (GMV) since its launch in spring 2021. Further, over 50,000 transactions have been processed each week.

After a successful kickoff in Lagos, Orda is ramping up its expansion in Nairobi, Kenya — which represents a $51 billion market opportunity.

As Orda innovates and expands its platform to serve the needs of independent food service businesses, Futi and his team continue to stay nimble by responding to restaurant owners, refining product features, and keeping abreast of what’s going on across Africa’s food industry and economy.

Of the constant improvements, Futi says, “The day I call 10 or 100 restaurants, and they say, “Orda is amazing. We will not leave Orda. We would not change your software” — that’s when our work is done.”

Quona and Fintech Collective co-led a $3.4 million seed round into Orda, as announced in Tech Crunch in November 2022.

Disclaimer: Quona portfolio companies were selected for profiles based on objective, non-performance-based criteria for the purpose of illustrating the types of investment made by Quona funds and their impacts. These profiles are being provided for illustrative purposes only, in order to provide examples of the idea generation, research, and thought process of Quona investment teams. No representation is made as to whether or if the investment ideas represented in these profiles have been or will be profitable. It should not be assumed that Quona will be able to identify similar investment opportunities in the future, or that any such opportunities will be profitable. The above statements include the opinions of the Firm and are for illustrative purposes only. There is no assurance that any trends depicted or objectives described in Quona profiles will continue or become successful.

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Quona Capital

Quona Capital is a venture firm specializing in financial technology for inclusion in emerging markets. Learn more at quona.com.