iProcure, a Kenyan agritech startup known for bridging the gap between agricultural product distributors and manufacturers, has recently filed for bankruptcy.
The company, which had previously raised a significant $17.2 million in funding, was in dire financial straits, leading to this unfortunate outcome.
iProcure’s journey to bankruptcy began with its inability to secure additional capital from existing and new investors. Despite the company’s efforts to maintain normal operations in the market, it faced an uphill battle in convincing stakeholders to invest further.
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iProcure needs bankruptcy protection
Stefano Carcoforo, co-founder and director of iProcure, made the company’s predicament public when he confirmed the need for bankruptcy protection to a Kenyan court. The affidavit filed by Carcoforo painted a grim picture: “The company has lately been unable to meet its financial obligations on a day-to-day basis.
Before April 26, 2024, iProcure was under administration, with KPMG’s advisory arm appointed to oversee the company. Makenzi Muthusi of KPMG Advisory Services now leads iProcure, managing all aspects of the company, including properties, operations, and creditors’ claims.
iProcure declares Debt Situation
While the exact amount of the company’s liabilities remains undisclosed, reports suggest that iProcure’s debts could exceed $1.5 million. This financial burden has led to the company’s failure to pay creditors, prompting the need for administration.
The future of iProcure hangs in the balance. If efforts to resurrect the company prove unsuccessful, liquidation may become the only viable option. This would allow the company to settle its debts and pay its creditors, albeit at the cost of its existence.
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Despite the current challenges, it’s worth noting that iProcure had previously secured a $1.2 million grant from the United States Agency for International Development (USAID) in March 2023. This grant was part of a larger $5.1 million initiative to support food production in Kenya.
iProcure’s situation is a cautionary tale for startups in the agritech sector and beyond. It highlights the importance of sustainable financial management and the need for continuous investor support. As the Kenyan agritech scene continues to evolve, the lessons learned from iProcure’s experience will undoubtedly shape the strategies of other regional startups. The industry watches with bated breath to see whether iProcure can navigate these turbulent waters or if it will be a stark reminder of the volatility inherent in the startup ecosystem.