Source: Tage Kene-Okafor, Annie Njanja/ TechCrunch
Sendy, a Kenyan logistics startup that enabled retailers to purchase FMCGs directly from manufacturers, among other services, is shutting down its operations and exploring a sale of its assets.
Meshack Alloys, Sendy co-founder, confirmed the sale to TechCrunch without offering more details, saying: “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.”
According to several sources, the company ran out of funds two months ago and had been scrambling to cut costs for the past year to remain afloat. Last July, it announced a 10% cut of its workforce, which Alloys noted was in response to the “current realities impacting tech companies globally.” Since then, however, Sendy’s workforce has been pruned further in more cost-cutting measures (shuttering a product line and exiting a market).
Last October, the Kenyan startup laid off 54 employees and wound down its supply service — and this February, it exited its end-to-end fulfillment offering in Nigeria, a market it entered two years ago.
Sendy’s struggles marked the latest setback for a crop of B2B e-commerce companies that enjoyed a fine run, raising millions of dollars and ballooning in value, but have since run into operational costs and marginal customer pricing problems.
The startup had targeted to raise $100 million last year but only got a fraction of the funding from MOL PLUS, the corporate venture capital of Japanese transport company Mitsui O.S.K. Lines. Since the deal, Sendy has been exploring other options to shore up its business these past few months, including seeking fresh capital and a buyer, three people familiar with the matter said. But that hasn’t come easy.
The Kenyan startup, valued at over $80 million late last year, was in talks with several investors to raise additional capital a few months back but at a lower valuation of $40 million to $60 million. However, one of its key investors backed out of the transaction, leaving Sendy short on funds for the last two to three months, including funds to cover salaries — it is now attempting to sell some of its assets, the people said.
Furthermore, the pool of potential buyers is small. According to people familiar with the company’s dealings, Sendy is in talks with other African companies in the B2B e-commerce and trucking space, including Trella, Sabi, Wasoko, and one of its investors, to sell some of its assets, including tech and fulfillment operations. It’s unclear if any of the talks have resulted in a deal, and discussions on various options could still be ongoing, including an acquisition, as claimed by the startup. Over 200 employees are set to be affected by the closure.
Sendy was co-founded in 2015 by Alloys, Evanson Biwott, Don Okoth and Malaika Judd. It has raised $26.5 million in disclosed funding from several investors, including Toyota Tsusho, Atlantica Ventures, VestedWorld, Keppel Capital, Enza Capital, AAICA Investment Pte Ltd, Sunu Capital and Goodwill Investments.
Source: Tage Kene-Okafor, Annie Njanja/ TechCrunch
