Kenyan logistics startup Sendy, known for its platform that facilitated direct purchases of fast-moving consumer goods (FMCGs) from manufacturers, is ceasing its operations and considering the sale of its assets, according to sources familiar with the matter.
Co-founder Meshack Alloys confirmed the acquisition process without divulging specific details but mentioned that a joint statement would be released in approximately two weeks.
The company had encountered financial difficulties, running out of funds two months ago and struggling to reduce costs over the past year.
In response to global challenges faced by tech companies, Sendy had previously downsized its workforce by 10% in July of the preceding year.
Further cost-cutting measures ensued, including discontinuing a product line and exiting a market.
Last October, the startup laid off 54 employees and subsequently shut down its supply service. In February, it ceased its end-to-end fulfillment offering in Nigeria, a market it had entered two years prior.
Sendy’s difficulties reflect the challenges experienced by various business-to-business (B2B) e-commerce companies that initially thrived, securing substantial funding and witnessing significant growth, but later grappling with operational costs and customer pricing issues.
Although the startup aimed to raise $100 million in funding the previous year, it only received a fraction of that amount from MOL PLUS, the corporate venture capital arm of Japanese transportation firm Mitsui O.S.K. Lines.
Consequently, Sendy explored alternative avenues to stabilize its business, including seeking additional capital and potential buyers. However, these endeavors proved challenging.
Previously valued at over $80 million, Sendy engaged in discussions with investors to secure additional funding at a reduced valuation of $40 million to $60 million.
Unfortunately, one key investor withdrew from the transaction, leaving Sendy financially strained for the past two to three months, including difficulties in meeting salary obligations.
Consequently, the company is now attempting to sell some of its assets, including technological and fulfillment operations.
The pool of potential buyers is limited, but Sendy has engaged in talks with African B2B e-commerce and trucking companies such as Trella, Sabi, Wasoko, and one of its existing investors.
It remains uncertain whether any agreements have been reached, and discussions regarding various options, including acquisition, are ongoing. The closure of Sendy will impact more than 200 employees.
Founded in 2015 by Meshack Alloys, Evanson Biwott, Don Okoth, and Malaika Judd, Sendy had raised $26.5 million in disclosed funding from various investors, including Toyota Tsusho, Atlantica Ventures, VestedWorld, Keppel Capital, Enza Capital, AAICA Investment Pte Ltd, Sunu Capital, and Goodwill Investments.
Source: Techcrunch
