Logistics firm Sendy is shutting down its operations in Kenya after failing to raise $100 million (Sh14 billion) to sustain its business.
The startup enables retailers purchase fast moving consumer goods (FMCGs) directly from manufacturers.
It plans to dispose its assets, after only raising about $20 million (Sh2.9 billion) in capital last year.
According to sources, the company ran out of funds two months ago and has been struggling to cut costs for the past year to stay afloat.
Among the strategies to keep the business afloat included the search for fresh capital and potential buyers which proved challenging.
“We are in the middle of an acquisition process. So yes, Sendy is being acquired. We will issue a formal joint statement in two weeks or so time. In the meantime, we are unable to comment on further details at this time,” said Sendy co-founder Meshack Alloys in a statement issued earlier this month.
In July 2022, the startup announced a 10 percent reduction of its workforce after its financial situation worsened.
Since then, the firm’s workforce has been chopped further in more cost-cutting measures.
Last October it laid off 54 employees and wound down its supply service — and this February, it exited its end-to-end fulfilment offering in Nigeria, a market it entered two years ago.
The B2B e-commerce company, has in recent times encountered challenges that reflect a larger trend within the industry.
Initially, it experienced considerable success, securing significant funding and witnessing a substantial increase in valuation. However, it has now encountered issues related to operational costs and customer pricing.
In 2022, Sendy aimed to raise $100 million in funding. Unfortunately, it only managed to secure a fraction of this amount from MOL PLUS, which is the corporate venture capital arm of the Japanese transport company Mitsui O.S.K. Lines.
Once valued at over $80 million, Sendy engaged in negotiations with multiple investors a few months ago to secure additional capital.
However, these discussions were contingent on a lower valuation of $40 million to $60 million.
A key investor withdrew from the transaction, leaving Sendy with limited funds for the past two to three months.
The closure of Sendy is projected to impact more than 200 employees.
Sendy was established in 2015 by co-founders Alloys, Evanson Biwott, Don Okoth, and Malaika Judd.
Throughout its journey, the company has secured a total of $26.5 million in disclosed funding from diverse investors, including Toyota Tsusho, Atlantica Ventures, VestedWorld, Keppel Capital, Enza Capital, AAICA Investment Pte Ltd, Sunu Capital, and Goodwill Investments.
