Nigerians have a strong connection to food, dedicating nearly 60% of their income to it, the highest globally, as reported by official sources. This love for food, combined with the growth of online shopping, creates an opportunity for Nigeria’s food delivery market to potentially reach $2-3 billion by 2032, according to industry experts.
Despite the promising outlook, there is no clear leader in the market yet. However, Chowdeck, based in Lagos and supported by Y Combinator, has raised $2.5 million in seed funding to establish a presence in a competitive landscape that has seen giants like Jumia and Bolt face challenges.
Founded by Femi Aluko, Olumide Ojo, and Lanre Yusuf, Chowdeck offers consumers the convenience of quick food delivery within 30 minutes. Aluko was inspired to start the business after experiencing efficient service during a trip to Dubai, where orders were consistently delivered on time with apologies for any delays, a stark contrast to Nigeria’s usual long wait times.
In the first half of 2023, Nigerians spent over ₦60 trillion on food and household items, highlighting the substantial market demand in the country, according to official statistics.
Chowdeck initially started with a few bikes and restaurant partnerships, refining their approach before officially launching the product in October 2021. The platform has seen rapid growth, attracting over 3,000 riders and serving over 500,000 users, with a significant monthly active user base.
Navigating the Market
Chowdeck’s growth comes in a competitive market, especially as established players like Jumia Food and Bolt Food exited, leaving Glovo as a major competitor.
Chowdeck has prioritized positive unit economics from the start, avoiding heavy discounts and focusing on sustainable business practices. This strategy has paid off, leading to steady growth and an almost twofold increase in users following the exit of key competitors.
By focusing on customer experience and operational efficiency, Chowdeck has differentiated itself in the market. The platform offers fast deliveries, diverse vehicle options for riders, and strict regulations for vendors to ensure timely service.
The platform’s logistics operations extend beyond food delivery to supermarkets, quick-service restaurants, and pharmacies across eight cities. Chowdeck’s innovative approach has led to substantial revenue growth, with a 24% take rate and a 1,200% increase in revenues between 2022 and 2023.
Paving the Way for Growth
Chowdeck plans to use its recent funding to enhance operational efficiency and expand its presence in more Nigerian cities. The platform is committed to improving the experience for customers, vendors, and delivery riders, with earnings for riders exceeding three to five times Nigeria’s monthly minimum wage.
The success of Chowdeck has attracted investments from notable backers and industry veterans, signaling confidence in the platform’s potential to redefine the food delivery landscape in Nigeria.
