Kenyan e-commerce startup, Wasoko, has encountered significant hurdles in the lead-up to its merger with MaxAB, including office closures, operational pauses, layoffs, and departures of high-profile executives.
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The company recently made the decision to shut down its Zanzibar office, which it established in 2022 as part of the Silicon Zanzibar initiative. Despite the closure, Wasoko intends to maintain its role as a “private sector ambassador” for the initiative. Additionally, operations in Uganda and Zambia have been temporarily paused, attributed to a broader company-wide restructuring aimed at focusing on more mature markets.
Although Wasoko described the actions as temporary pauses, they have nonetheless resulted in a reduction in staff, though the exact number of affected employees was not disclosed.
Following the merger with MaxAB in 2023, several key executives departed from Wasoko, including co-founder Josh Raine, CFO Sundararaman Pattabiraman, CTO Tridiv Vasavada, and head of human resources Carolyne Mwaura. The departure of these executives was accompanied by layoffs affecting 10% of the workforce in January, driven by overlapping roles in the newly combined entity.
An anonymous ex-employee expressed concerns about the merger, suggesting that Wasoko’s Kenyan team had been overshadowed by MaxAB’s arrival, with top leaders departing despite claims of equality in the merger.
Wasoko disputed this narrative, asserting that adjustments resulting from the merger affected staff on both sides and emphasizing the challenges of merging two organizations.
Nine former employees have filed lawsuits against Wasoko, alleging unsatisfactory exit packages and rushed processes following the merger announcement. These claims highlight tensions surrounding the merger and its impact on employees.
Since its inception in 2013, Wasoko has raised $152 million across various financing rounds, including a significant Series B round in 2015, led by Tiger Global Management and Avenir Growth Capital. The company operates primarily from its Nairobi headquarters but has a presence in other African countries, including Senegal and Cote d’Ivoire.
Despite the challenges and transitions associated with the merger, Wasoko remains committed to concluding the merger with MaxAB by the end of March 2024. However, the process has underscored the complexities and disruptions inherent in combining two major players in the e-commerce space.
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