The sophomore fund of Zebu Investment Partners GP Limited (ZIP), the Africa Food Security Fund, has successfully closed its investment in Royal Oven Limited, Tanzania. Royal Oven is a leading QSR retail bakery chain, offering a diverse range of products which innovatively combine traditional Tanzanian food with international bakery trends. The AFS Fund focuses on food production and processing throughout Africa, underpinned by the assertion of the positive impact which investing across the consumer value chain can have for food security, through improved reliability of the supply chain for processors.
Royal Oven opened its first retail bakery in 2008 in Dar es Salaam and has since grown to 19 stores across Tanzania. The Company operates a central kitchen and bakery in key hubs, ensuring consistent quality and freshness of products to consumers daily. Tanzania has been one of Sub-Saharan Africa’s most rapidly growing economies, albeit plagued with infrastructure gaps and an inefficient product supply chain, touted by investors as an impediment to retail expansion in the country. Royal Oven’s ability to expand with various store size options and control its supply chain has made it agile and resilient in what some might see as a challenging operating environment.
“We’ve built Royal Oven over the past decade, with a relentless pursuit for superior quality, customer centric service and distinguished taste – entrenching our brand in the minds of consumers. We are excited to partner with AFS Fund, which will enable us to realise our strategy of creating a Tanzanian-grown quick-service restaurant (QSR) offering with a significant Sub-Saharan Africa footprint. Expansion of Royal Oven’s product offering and route to market will also have ripple effects for our suppliers and consumers across the spectrum, which is core to our purpose”, said Exaudi Kiwali, Executive Chairman and Co-Founder of Royal Oven.
“Royal Oven is an ideal candidate for our mandate, which seeks transformative opportunities in a way that creates a real standard around food security on the continent, whilst partnering with strong, committed and proven management teams who are open to the value-add associated with private equity partners. We look forward to the partnership with Royal Oven, in creating a Tanzanian QSR with wider ecosystem positive impact, whilst upholding international food and safety standards,” Zebu Senior Managing Partner, Dennis Matangira, said in a statement.
The AFS Fund’s Technical Assistance Facility (TAF), once fully funded, will explore the possibility of funding inclusive projects targeting suppliers and continuing to expand the Company’s product offering to capture Base of the Pyramid (BoP) consumers.
The AFS Fund achieved first close at US$84 million in 2018, with final close targeting US$100 million.
The AFS Fund TAF is in the process of first close and will be managed and implemented by TechnoServe.