Nigerian food delivery startups are attracting the attention of international investors, optimistic about growing demand for home-cooked meals in Africa’s most populous country even as food inflation soars.
Local industry leaders Chowdeck, FoodCourt and Heyfood, both backed by startup incubator Y Combinator, as well as Spain’s Glovo, are jostling to capture market share and meet the needs of a population where the average family spends around 60% of its income on food.
The market in Nigeria is expected to more than double to $2.4 billion over the next eight years, with a compound annual growth rate of nearly 11%, market research group IMARC estimates in a report.
“Africa has enormous potential,” Sacha Michaud, co-founder of Glovo, told the Financial Times. “We are seeing rapid growth in our business across Africa and especially Nigeria,” thanks to better internet speed and coverage.
Two-year-old Chowdeck in April announced $2.5 million in seed funding from investors including California-based Y Combinator, a backer of Instacart and DoorDash, and the co-founders of Bogotá-based Rappi, Latin America’s largest online delivery platform.
Glovo, owned by German-listed Delivery Hero, raised more than half a billion dollars three years ago, with plans to expand beyond its Spanish roots into Africa. The company has invested more than $100 million to establish itself on the continent. It entered Nigeria in 2021 and operates in six other countries.
Start-ups are banking on the potential size of the Nigerian market, which has 200 million inhabitants. Urban dwellers in particular are increasing their internet use as the country, like much of Africa, improves its networks.
However, the economic crisis threatens to dampen the sector’s growth prospects as Nigeria suffers its worst cost of living crisis in a generation, with inflation at a three-year high of nearly 34 percent. Food inflation is at 40.7 percent. The local currency, the naira, has lost about 70 percent of its value against the US dollar after two devaluations in the past year.
Multinational companies that invested in Nigeria, betting on a rising middle class, are withdrawing from the country and the economy has fallen from first place two years ago to third place in Africa today.
Bolt Food, the food delivery arm of Estonian ride-hailing service Bolt, closed shop there last year. The same was true for Jumia, the pioneering e-commerce group listed in New York.
At the time, Jumia “had determined that its food delivery business was not suited to the current operating environment and macroeconomic conditions.” The company, at its peak, could barely muster 19,000 daily orders across 11 countries, according to a person familiar with its operations.

Elsewhere, in the US and Europe, the four largest food delivery apps have struggled to sustain a pandemic-fueled growth spurt and have collectively lost more than $20 billion since going public. Many question their potential to generate profits.
“Food is essential, delivery is not,” said Eghosa Omoigui, a venture capitalist at Lagos-based EchoVC. “How big is the target market for food delivery in Nigeria and how fast is this market shrinking?
He stressed a “direct correlation between those who are employed and those who order deliveries,” adding that the business is “much more difficult” to create and even more difficult to grow.
Omoigui, however, highlighted the potential for success, particularly if companies deliver reliably.

Glovo and Chowdeck are among the startups working to improve standards from the industry’s early days, when meals often took hours to arrive or were delivered half-eaten or not at all. Both companies have reduced wait times to about 40 minutes.
“Food delivery seems like a necessity and I don’t understand why more food delivery companies can’t work in Africa,” Femi Aluko, co-founder of Chowdeck, told the FT. “I kept hearing the same thing: it can’t work in Nigeria because of the traffic, the behaviour of the passengers and the unreliability of the dispatch.”
For Aluko, the impetus to create Chowdeck came after struggling during the Covid-19 pandemic to get ready-made meals delivered quickly to her home in Lagos.
His company, launched in January 2022, now makes 20,000 deliveries daily and is looking to expand beyond the eight Nigerian cities where it operates. The startup has diversified into other deliveries such as medicines and groceries, as has rival Glovo.

Other local industry players include FoodCourt, which collects from its own ghost kitchens rather than third-party outlets. Heyfood operates mainly in the southwestern city of Ibadan and the capital, Abuja.
Sendme, with support from Y Combinator, is sending meat to households and businesses in Ibadan. The company has temporarily suspended deliveries as it expands its offerings and improves its processes, according to its website.
“One of the problems for businesses in emerging markets – and Nigeria certainly qualifies this – is that there is a very low level of trust because reliability is a very important objective,” Omoigui said.
“If you can be reliable, you will never have a retention problem,” he added. “The assumption is that Nigerians, as price sensitive as they are, will pay a premium for reliability. »