According to information obtained by TechCrunch, the Kenyan logistics company Sendy, which among other services, made it possible for merchants to acquire FMCGs directly from manufacturers, has decided to wind down its operations and is exploring the possibility of selling its assets.
In an interview, Meshack Alloys, one of the co-founders of Sendy, acknowledged the transaction without providing any other information, adding, “We are in the middle of an acquisition process.” He revealed that consequently, Sendy is going to be purchased. In approximately two weeks, they will publish a formal unified statement regarding this matter.
The company reportedly ran out of money two months ago and had been desperately trying to slash costs for the past year in order to stay afloat. This information comes from multiple sources. In July of 2018, it made the announcement that it would be cutting its employment by 10%. Alloys stated that the decision was made as a reaction to the “current realities impacting tech companies globally.”
Since then, however, Sendy has implemented further actions (such as discontinuing a product line and leaving a market) that have the effect of reducing the size of its personnel. The Kenyan startup terminated the employment of 54 people and ceased operations of its supply service in October of last year. More recently, in February of this year, the company ceased operations of its end-to-end fulfilment offering in Nigeria, a market it had entered two years earlier.
Sendy’s woes represented the latest setback for a crop of B2B e-commerce companies that had a wonderful run, raising millions of dollars and skyrocketing in value, but have now run into operational costs and marginal client price problems. Sendy’s struggles marked the latest setback for a crop of B2B e-commerce companies that had a fine run, raising millions of dollars and ballooning in value.
Read also: Kenyan startup Sendy lays off 20% of its staff, shuts down product
Sendy’s other plans
The startup’s goal for the previous year was to obtain $100 million, but MOL PLUS, the corporate venture capital arm of Mitsui O.S.K. Lines, was only able to provide a small portion of the necessary investment. According to three persons with knowledge of the situation who were acquainted with the case, after the sale, Sendy has been looking at various opportunities to bolster its business in the recent months, including seeking fresh financing and a buyer. However, this has not been a simple process.
The Kenyan business, which had a valuation of more than $80 million towards the end of the previous year, had been in discussions with a number of investors to raise additional cash a few months ago, but the valuation had been reduced to between $40 million and $60 million. Sendy has been short on finances for the past two to three months, including cash to support salaries; as a result, the company is now attempting to sell some of its assets, as stated by the persons. This was due to the fact that one of its most important investors pulled out of the transaction.
Sendy receives Funding from MOL PLUS to expand across Africa
More details
Additionally, there is a limited audience of prospective purchasers. According to individuals who are aware of the company’s affairs, Sendy is reportedly in discussions to sell some of its assets, including tech and fulfilment operations. These discussions are taking place with other African companies that operate in the B2B e-commerce and trucking industry, such as Trella, Sabi, Wasoko, and one of its investors. It is not apparent whether any of the negotiations have resulted in a deal, and it is possible that discussions on numerous options, including an acquisition, as claimed by the startup, are still in progress. The closure is expected to have an impact on the jobs of more than 200 employees.
Alloys, Evanson Biwott, Don Okoth, and Malaika Judd are credited with having co-founded Sendy in the year 2015. It has been announced that it has raised a total of $26.5 million in funding from a number of investors, including Toyota Tsusho, Atlantica Ventures, VestedWorld, Keppel Capital, Enza Capital, AAICA Investment Pte Ltd, Sunu Capital, and Goodwill Investments.