Chowdeck, an on-demand delivery service based in Nigeria, has successfully raised $2.5 million in seed funding to enhance its operations and extend its reach into additional cities across the country.
The seed funding round attracted a variety of investors, including YCombinator, Goodwater Capital, FounderX Ventures, Hoaq Fund, Levare Ventures, True Culture Funds, and Haleakala Ventures. The round also saw participation from notable individual investors such as Simon Borrero and Juan Pablo Ortega, co-founders of Rappi — Latin America’s largest online delivery platform, as well as Shola Akinlade and Ezra Olubi, co-founders of Paystack, Sudeep Ramani of Sportybet, Ayo Arikawe of Thrive Agric, and Karthik Ramakrishnan from Amazon.
Since its inception in October 2021 following the COVID-19 lockdown in Lagos, Chowdeck has rapidly grown to serve eight Nigerian cities including Lagos, Abuja, Ibadan, Port-Harcourt, Ilorin, Benin City, Abeokuta, and Asaba. The company has amassed over 500,000 users and more than 3,000 riders, who typically earn as much as senior civil servants in Nigeria.
With this new injection of capital, Chowdeck plans to consolidate its market leadership in these cities and set the stage for further expansion across Nigeria.
The food delivery market in Nigeria is becoming increasingly competitive with several key players such as Glovo, FoodCourt, and ChopTown, among others.
Last year, Chowdeck bolstered its market presence by securing exclusive partnerships with Nigeria’s largest QSR brand, Chicken Republic, and subsequently adding Shoprite. These strategic partnerships have significantly boosted user acquisition and reinforced its competitive edge in the Nigerian market.
With the latest round of funding, Chowdeck is planning an aggressive expansion to reach more Nigerian cities by the end of 2024.
“We understand the importance of good food for Nigerians and aim to make it as accessible as possible. Chowdeck was created with the mission to serve this need, and we are dedicated to providing outstanding service to our customers, vendors, and riders,” stated Aluko.
The on-demand delivery sector in Nigeria has seen substantial growth, driven by increasing urbanization, higher Internet and smartphone usage, and evolving consumer behaviors. According to Statista, the online food delivery market is expected to reach revenues of $2.83 billion by 2024, with an annual growth rate of 15.03% from 2024 to 2029.
However, operating in Nigeria’s food delivery market comes with its set of hurdles, including frequent fuel shortages, poor road conditions, and congested traffic in major cities. Additionally, economic challenges have tightened budgets for many potential customers.
For instance, Jumia Food and Bolt Food both exited the Nigerian market in 2023, aiming to optimize their operations and focus on profitability. Despite these exits and the challenging environment, Chowdeck, which debuted the same year as Bolt Food, continues to experience growth and success.
