Inside ChowCentral: Y Combinator’s latest food delivery bet in Africa

TechCabal caught up with Tosin Onafuye, and Adeyemi Onafuye, Co-founders of ChowCentral Y Combinator’s Summer class of 2023. Here’s how the team is re-imagining the food restaurant business.

When Tosin Onafuye started 500Chow—ChowCentral’s subsidiary—as a fun experiment in April 2020, his plan was to deliver quality meals at the most affordable rate. “We started 500 Chow to sell meals for N500 for people that didn’t have so much money during the covid lockdown,” he tells me on a video chat from ChowCentral’s kitchen in Lekki.

Onafuye and his team experimented throughout the 2020 lockdown. Afterward, they pivoted into a new business model—a food marketplace to deliver meals. This attempt failed; “At the time, we had not gotten so much funding, and we had not gotten so much experience; we had just finished school in 2019, and we wanted to start a business in 2020, so we went to work,” he said.

After the attempt failed, the 500Chow team went their separate ways. Christopher Obasi, the company’s CTO and Yemi Onafuye, the COO, moved to Moniepoint to build products, while Tosin Onafuye joined Vendease (W21), a B2B startup that services restaurants. With the benefit of hindsight, Onafuye says moving on to different things was a learning curve for the team. In August 2022, the team reunited to set up a central kitchen in Lagos, and ChowCentral was born.

The idea for ChowCentral was borrowed from Yum, the American multinational fast food corporation which operates the brands KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill. At present, ChowCentral, owns two brands: 500Chow, and Gregg’s Grill. ChowCentral allows customers to order meals on the app from only 500Chow, pay with their in-app wallet and track their orders in real-time—meal prices on the platform range from N1500-N4000.

ChowCentral: The Facelift

ChowCentral has no plans to include third-party restaurants on the app, raising valid questions about variety. On competitor platforms like Chowdeck, users choose from several restaurants that offer a wide variety. ChowCentral’s COO insists that their app always has something for everyone at all times of the day. “We are not like Chowdeck or Jumia Food; we are a restaurant. Even though we are virtual and do food delivery, our core business is restaurants.” By focusing on restaurants as its core offering, ChowCentral can control quality.

ChowCentral got an undisclosed pre-seed investment in 2022 led by Ventures Platform, DFS Lab and other angel investors. The startup is one of only three African startups selected in this year’s Y Combinator’s Summer cohort

. “The training and learnings from the impact of the cohort and advice from partners will help us align with the strategies we are trying to achieve,” Onafuye said. ChowCentral joins the list of Y Combinator food bets in Africa, having previously backed Chowdeck and FoodCourt in their 2022 cohort.

Bowl of challenges

Recent numbers from the National Bureau of Statistics show that food prices are the biggest driver of Nigeria’s inflation figures. Additionally, 90% of Nigeria’s working population spends more than half of their income on food and related expenses. For a startup promising quality meals at affordable prices to Nigeria’s GenZ and Millennials—who represent a bulk of Nigeria’s working population—ChowCentral has its work cut out.

The company CEO, however, remains unfazed. “We source materials locally; we try to get the lowest possible price at the best possible quality. Unlike the average person, as a restaurant, you can buy larger quantities at a reduced price. It doesn’t mean that the price of things do not also rise, ” he said. “The customers bear more of the eventual cost. There is no way around it; it’s a macroeconomic condition that we have to adjust to. We are working around it. There are no easy answers to these macroeconomic problems”

As with most food delivery startups, Logistics poses a big challenge. Onafuye and his team use select riders for orders from the ChowCentral app. “Also, we use bicycles for our deliveries to lessen the delivery fee,” Onafuye, told TechCabal. “Logistics have not proven too challenging for us; it’s just the people. Finding reliable people has proven to be the most difficult.”

According to Onafuye, ChowCentral has $80,000 in monthly revenue and currently serves thousands of customers in Lagos Island and Surulere, Lagos mainland. Onafuye says there are plans to expand into other locations in the country. ChowCentral joins an increasingly competitive food delivery landscape with Jumia Food, Bolt Eats, Glovo, and AreaChops; Onafuye asserts that these are not competitors. “Chowdeck and the rest will be more focused on the delivery,” he said. “Ours is just to focus on quality and attracting customers to the brand. We are focusing more on the food as our core service” Chow Central’s description on Y Combinator’s page is building restaurant chains for Millennials and Gen Z living in African cities who want high-quality and healthy meals,” Onafuye affirms that they will stick to this goal till they put African dishes on the map.