Food Delivery Upstart Chowdeck Doubles Down Amid Market Shakeup & Rival Retreat

By  |  April 30, 2024

Nigeria’s food delivery upstart Chowdeck—bolstered by today’s announcement of a seed round totalling USD 2.5 M, only a day after rival Glovo announced its departure from Ghana over profitability struggles—is doubling down on its efforts to disrupt the industry, even as larger players either scale back their operations or close shop.

The startup finds itself navigating a dynamic landscape marked by recent shakeups and exits among industry incumbents. Against the backdrop of Jumia Food shuttering its operations across several African markets having grappled with ‘fast food, slow money,’ Bolt Food‘s departure from Nigeria and South Africa, and Glovo‘s recent exit from Ghana, Chowdeck appears to be holding its nerve in an industry estimated to be worth billions of dollars but facing significant headwinds.

The closure of Jumia Food, once a prominent player in the African food delivery scene, echoes the challenges inherent in the market. Similarly, Bolt Food’s decision to withdraw from key markets reflects the daunting economics and competitive pressures facing food delivery startups. Meanwhile, Glovo’s departure from Ghana further highlights the notoriously tricky nature of the space.

In the face of these developments, Chowdeck remains keen on sustainability and profitability. Unlike its predecessors that gave in to unsustainable business models and aggressive expansion strategies, Chowdeck adopts a measured approach to growth, its CEO Femi Aluko implies.

“We took the time to figure out the right economics for our delivery business, which is why we’re not big on offering unrealistic discounts,” Aluko told TechCrunch. “This approach kept us focused on selling and targeting the right customers rather than trying to capture everyone, which could’ve compromised our economics and marketing strategies.”

By focusing on efficiency, operational excellence, and rider and customer satisfaction, Chowdeck aims to carve out a niche in Nigeria’s rapidly evolving food delivery market, as well as the grocery, pharmacy and recently launched package delivery verticals.

Since launching in October 2021 after the COVID-19 lockdown in Lagos, Chowdeck claims it’s acquired more than 500,000 users and more than 3,000 riders (typically earning the same as senior civil servants in Nigeria), per a release shared with WT, that serve 8 Nigerian cities (Lagos, Abuja, Ibadan, Port-Harcourt, Ilorin, Benin City, Abeokuta and Asaba).

The recent infusion of USD 2.5 M in seed funding provides the Y Combinator-backed startup with a platform to weather industry turbulence and pursue strategic initiatives.

The shutdown of major players like Jumia Food and the exits of Bolt Food and Glovo from notable markets serve as cautionary tales for the industry. Chowdeck, however, sees opportunity amid the chaos. With its awareness of the market dynamics and a focus on execution, Chowdeck is poised to capitalise on the void left by its predecessors. The exits of rivals partly contributed to Chowdeck’s almost twofold user growth within the last six months, reports suggest.

The recent seed funding round positions Chowdeck for growth and expansion. The startup plans to invest in key areas such as logistics optimisation, technology infrastructure, and market expansion. By leveraging data-driven insights and automation, Chowdeck aims to enhance the efficiency of its operations and succeed where others faltered.

Featured Image Credits: OpenTable

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