Tanzanian food firm secures $40M to expand into Kenya

Tanzania’s East Africa Foods has raised $40 million to expand its agricultural supply chain into Kenya, aiming to serve 100,000 smallholder farmers amid growing instability in East Africa’s food distribution networks. The financing, led by InfraCo—the investment arm of the Private Infrastructure Development Group (PIDG)—alongside FMO and Oikocredit, directly addresses long-standing inefficiencies in the region’s food systems. The funding will accelerate construction of processing, storage, and transport infrastructure while scaling its digital platform for coordinating produce sourcing and distribution.

Currently, the company works with over 28,000 registered farmers and supplies more than 10,000 urban retailers across Tanzania. Its brands, Onja, Golden Banana, Onion King, and Potato King, depend on a fleet of over 100 trucks to transport goods from farms to markets. The investment arrives as Twiga Foods, once Kenya’s most prominent agritech startup, enters administration. GT Flow Limited, Twiga’s operating entity, filed for administration in August 2026, followed by its parent company, now Templar Field Limited, in September. The collapse illustrates the financial and operational risks of scaling food distribution in fragmented markets, where thin profit margins and logistical hurdles often surpass the benefits of technology alone.

East Africa Foods’ strategy contrasts sharply with Twiga’s. While Twiga built a tech-driven distribution network connecting producers to informal retailers, East Africa Foods controls its own processing, storage, and transport systems. The company has reduced food losses across its own supply network by one-third. It attributes much of the loss to gaps in post-harvest infrastructure, including inadequate aggregation, storage, and reliable transportation, rather than a lack of agricultural production.

Founder and CEO Elia Timotheo said: “It attributes much of the loss to gaps in post-harvest infrastructure, including inadequate aggregation, storage and reliable transportation, rather than a lack of agricultural production.” The new funding will enable the company to invest in additional warehouses, processing facilities, and long-haul transportation to address these losses as it enters Kenya.

Twiga’s Collapse Exposes Agritech Risks

Twiga’s difficulties reflect broader challenges for agritech firms in the region. Despite raising over $110 million, the company faced layoffs, operational disruptions, and a pivot toward consumer-goods distribution before its administration. The differences between the two models, one relying on direct supply chain control and the other on outsourced logistics, highlight distinct approaches to solving the same core issues: fragmented production, high transport costs, and food spoilage. East Africa Foods’ expansion into Kenya will determine whether its Tanzanian model, built on owned infrastructure and direct farmer relationships, can succeed in a new market without repeating Twiga’s financial struggles.

The $26 million Series B round was supplemented by debt funding from The Schmidt Family Foundation, with participation from existing investors including Acumen Resilient Agriculture Fund, Goodwell Investments, Africa Eats, and FINCA International. The financing package cleared regulatory reviews by COMESA, Tanzania’s East African Community competition authority, and the Zanzibar Fair Competition Commission. The company now plans to extend its digital coordination systems, already used to manage sourcing, branch operations, and retailer deliveries in Tanzania, to Kenya. The test will be whether it can balance growth with financial discipline as it scales infrastructure and farmer outreach across two countries.

Replicating Tanzania’s Controlled Supply Chain

The investment will allow East Africa Foods to replicate its Tanzanian model in Kenya, where it will establish collection centers in key agricultural regions. These hubs will consolidate produce from smallholder farmers, many of whom currently sell directly to middlemen at below-market prices. Existing gaps in storage and transportation will be addressed through partnerships with local warehousing operators and expanded trucking routes.

Unlike Twiga, which outsourced logistics to third-party providers, East Africa Foods will maintain direct control over transport and storage. Its existing fleet of 100 trucks will be expanded with new long-haul vehicles to connect rural collection centers with urban distribution hubs. Digital tools currently used to track produce from farm to retailer in Tanzania will be deployed in Kenya to optimize routes and monitor storage conditions.

Gender Equity and Climate-Resilient Farming

East Africa Foods has set a goal of including 45% women among the 100,000 farmers it plans to engage in Kenya and Tanzania. The company will expand training programs to teach climate-smart farming techniques, such as drought-resistant crop varieties and improved soil management, to both men and women producers. These efforts align with regional initiatives to strengthen agricultural resilience against erratic rainfall and rising temperatures. The funding will also support the development of farmer cooperatives, which the company believes will improve bargaining power and income stability.