Cloud-based point of sales for small, medium and large-sized restaurants has increased tremendously in both size and popularity. The market, dominated by incumbents like Toast and upcoming players such as MarginEdge and Brazil's Zak, has its value pegged at over $70 billion globally and is expected to reach $116 billion in the next four years.
As with most technologies, Africa is playing catch up in this food-tech segment. But a few startups are paying attention to the market, positioning themselves to become top players when it matures. One such startup is Nigeria's Orda, formerly known as StarKitchens. Today, it is announcing that it has secured a $1.1 million pre-seed round to scale its software across Africa.
The company, which describes itself as a 'cloud-based restaurant operating system built for African chefs and food business owners,' had its round led by pan-African investor LoftyInc Capital.
Other institutional investors include Techstars Boulder, Magic Fund, Hustle Fund, Norrsken Foundation, Microtraction, DFS Labs, Oxford Seed Fund, Enza Capital, Agrolay Advisors, and angel investors such as Buycoins' Ire Aderinokun, Jesse Ovia and Ademola Adesina.
While big restaurants and restaurant chains are often capable of setting their management systems or using well-known point-of-sale providers, thousands of smaller restaurants in Africa rely on offline methods such as pen and paper to produce receipts and make reconciliations.
Orda's addressable market is this segment of Africa's restaurant industry. With its cloud-based software, Orda wants these businesses not to rely on manual ways of managing their businesses.
"There are two kinds of restaurants where the majority of our focus is on -- the bukkas [local restaurants] and the small restaurants, for instance," Orda co-founder and CEO Guy Futi told TechCrunch in an interview.
"These are the restaurants that have been using paper and pen and then that spend three to four hours on reconciliation. They don't have access to software that does analytics and inventory management right off the gate. So, we decided to build a cloud-based restaurant software tailor-made for Africa's massive chefs and restaurant industry."
The typical examples of food or restaurant-focused tech businesses help restaurants make online deliveries, such as Jumia Food or Glovo; others try to handle entire supply chains like YC-backed Vendease. Orda's full-stack and end-to-end approach -- a result of constant building and iteration according to CTO Fikayo Akinwale -- helps restaurants manage these processes online while integrating local payments, logistics, inventory management and business analytics features.
"Orda was built from a near 18 months of a collaborative customer feedback loop. We listened to everything, from how African restaurants reconcile inventory, how customers pay, to how they handle logistics and more. We can confidently say that no one has done as much work as we have to build an end-to-end solution for our food business owners.", said the CTO in a statement.
Restaurants who use the management platform also have access to a dashboard that allows them to accept and process orders from food delivery services Jumia Food, Glovo, Bolt Food, and in-store, website, social media channels like WhatsApp.
Orda claims no other company in its space has made similar integrations. These integrations, including an ePos solution that restaurants can operate in remote areas with little or no internet coverage, give Orda an edge in the market, said Futi.
Futi also remarked that the adoption from restaurants in markets where it operates (Nigeria and Kenya) has been "very seamless," adding that the cloud-based software doubles its growth rate every three weeks. In a statement, Orda said its gross merchandise value (GMV) grows 15% week-on-week while processing up to 10,000 transactions weekly.
Currently, Orda charges restaurants between $5 (~₦2,500) to $50 (~₦30,000) monthly to access its software. Having closed its pre-seed and working towards raising a seed round, the CEO said Orda would build out financial products, especially in lending, and venture into processing payments for restaurants.
Orda is somewhat replicating the business model of companies like Toast that have noticed massive growth after launching fintech technology solutions. Last year, 80% of the U.S. company's third-quarter revenue of $486.4 million came from payment processing and offering financial products; however, most of its total costs incurred came from the segment as well.
"We want to become like the Toast of Africa," expressed the chief executive, adding that Orda would also double down on its white-label mobile applications (similar to Toast Takeout) for restaurants that leverage its cloud-based infrastructure to operate.
Futi, who founded the company with Akinwale, Mark Edomwande, Kunle Ogungbamila, and Namir El-Khouri in 2020, said with the new and subsequent funding, Orda is working on an expansion into South Africa by the end of this year.
Idris Ayo Bello, the managing partner of lead investor LoftyInc Capital, said this of the investment, "We loved investing in Orda because it is building the core digital infrastructure for restaurants across Africa. The team has done the hard work of figuring out the core problems that African restaurant owners are facing and is building a solution that can revolutionise the food business across the continent."