Lagos-based food delivery startup Chowdeck has secured $2.5 million in seed funding to expand its operations and compete in Nigeria’s growing on-demand delivery market.
Founded in 2021 by Femi Aluko, Olumide Ojo, and Lanre Yusuf, Chowdeck makes swift deliveries within an average of 30 minutes. Aluko’s experience in Dubai, where he encountered exceptional customer service and prompt deliveries, was the inspiration for launching the company.
Despite entering a market already occupied by established players like Jumia Food and Bolt Food, Chowdeck has achieved commendable growth.
The company attributes this success partly to its focus on profitability from the outset. Unlike competitors who relied heavily on discounts, Chowdeck prioritizes sustainable business practices by minimizing discounts and offering them strategically on behalf of partner restaurants.
“We figured out the right economic model for our delivery business,” said Aluko, a former engineer at Stripe subsidiary Paystack. “We target the right customers who prioritize convenience and are willing to pay for fast deliveries, rather than trying to capture everyone with unsustainable discounts.”
The exits of Jumia Food and Bolt Food from the Nigerian market in late 2023 further enhanced Chowdeck’s user base, which has nearly doubled in the past six months.
Chowdeck emphasizes convenience as its key selling point. The platform utilizes geotagging to optimize delivery routes and offers varying vehicle options like bicycles and motorbikes. Additionally, strict timeframes are enforced on both vendors and riders to ensure prompt service.
Beyond food deliveries, Chowdeck has expanded its services to include grocery and pharmacy deliveries through partnerships with supermarkets like ShopRite and pharmacies. This multi-vertical approach has seen Chowdeck’s annual gross merchandise value (GMV) surpass ₦7 billion ($5.8 million) in 2023. The company currently operates in eight Nigerian cities, with Lagos generating 80% of its business.
The newly acquired capital will enable Chowdeck to improve operational efficiency and expand to more Nigerian cities. The company also plans to invest in enhancing the experience for its customers, vendors, and especially its delivery riders, whose earnings currently exceed three to five times the national minimum wage.
“We saw the potential impact we could have on the delivery landscape in Nigeria, particularly around rider earnings,” said Aluko. “Many of our riders consistently earn between ₦100,000-200,000 ($83-$170) monthly.”
Chowdeck’s seed round attracted investors, including Y Combinator, Goodwater Capital, and prominent founders like Simon Borrero and Juan Pablo Ortega of Rappi, and Shola Akinlade and Ezra Olubi of Paystack.
