Nigerian startup offering on-demand delivery services, Chowdeck, has secured $2.5 million in seed funding.
This investment, led by notable backers such as FounderX Ventures, True Culture Funds, Hoaq Fund, Levare Ventures, Haleakala Ventures, YCombinator, Goodwater Capital, and True Culture Funds, along with angel investors like Ayo Arikawe, Shola Akinlade, Ezra Olubi, Sudeep Ramani, Karthik Ramakrishnan, Simon Borrero, and Juan Pablo Ortega, marks a significant milestone for the company.
Inspired by the efficiency of food delivery services in Dubai, co-founder and CEO Femi Aluko, a former principal engineer at Paystack, launched Chowdeck in 2021. Since then, the startup has experienced rapid growth, amassing 500,000 users across eight Nigerian cities, with an additional 200,000 users joining in the last six months alone.
Building on its success, Chowdeck has secured exclusive partnerships with major brands like Chicken Republic and Shoprite, further solidifying its position in the Nigerian market. With this new funding, the company aims to expand its services to more cities within Nigeria by the end of 2024.
Aluko emphasizes Chowdeck’s commitment to providing exceptional experiences for customers, vendors, and riders alike. Despite challenges such as fuel scarcity, poor infrastructure, and economic constraints in Nigeria’s food delivery market, Chowdeck distinguishes itself through its focus on profitability and efficient operations.
Unlike competitors who often subsidize delivery fees, Chowdeck opts for higher charges to ensure profitability on every transaction. Despite potentially deterring some users, Aluko remains confident in Chowdeck’s ability to address the convenience needs of its target audience.
Utilizing a hyperlocal model, Chowdeck achieves an average delivery time of just 30 minutes, attracting widespread praise from users. However, rapid growth has presented operational challenges, particularly for partner restaurants struggling to meet increasing demand.
To support these businesses, Chowdeck facilitates connections with lending partners, though specific figures remain undisclosed. Moreover, the company has garnered attention for its rider compensation scheme, with some earning significantly above the national minimum wage.
Aluko underscores the sustainability of Chowdeck’s approach, wherein rider pay aligns closely with delivery fees, ensuring profitable unit economics for the business. Despite not being the cheapest option, Chowdeck remains dedicated to providing value for both customers and riders alike.
