Sendy, a Kenyan company, has stated that it would discontinue one of its products, Sendy Supply, resulting in the termination of 20% of its workforce. This comes less than three months after the business cut off 10% of its workforce due to “global realities hitting technology enterprises.”
Sendy Supply, a tool that enables merchants to buy merchandise from numerous suppliers and manufacturers, will be suspended while the firm focuses its attention on Sendy Fulfillment.
Fifty-four individuals lost their jobs when the supply service ceased, the latest casualty of the financing slowdown caused by macroeconomic challenges. Sendy, which now solely serves corporations, hasn’t raised the $100 million it intended, for this year.
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What is Sendy saying?
Sendy CEO Meshack Alloys told employees in a teleconference that the company missed its previous quarter’s forecasts and that improvements were required. “If we look at KPIs, we’re moving in the correct path, particularly our contribution margins, gross profits, take rates, and EBIDTA,” said Alloys, who co-founded the firm in 2015 with Evanson Biwott, Don Okoth, and Malaika Judd.
According to Mesh Alloys, CEO and co-founder of the firm, the new development is part of a larger strategic goal to “consolidate efforts around solutions that touch more consumers.”
Sendy Transport helps carry tiny items, medium-sized commodities, and huge freight. All these items help the startup expand its enterprise.
“With the increased penetration of digital commerce and the potential it brings for companies, we’re doubling down on fulfillment to serve online merchants,” Alloys added.
The company’s newest business model has changed. It was declared two weeks ago that firms would only utilize Sendy Transport. Its three products at the time, Sendy Transport, Sendy Supply, and Sendy Fulfillment, were all business-focused.
The company’s future strategy is to rapidly grow Sendy Fulfillment, its primary business, through enhancing customer value. It thinks that this combined service offers a big chance for both big and small businesses to solve problems with storage, packing, and last-mile delivery.
Why is the company discontinuing supply?
While pointing out more reasons why the firm is leaving supply and focusing more on its fulfillment division, Alloys said that Sendy Fulfillment is a core product with a larger addressable market than supply and that, in contrast, to supply, it is not impacted by pricing changes.
“We are doubling down on fulfillment to support online merchants with the necessary tools to sell and fulfill directly through digital platforms,” he said. “With the growing uptake of digital commerce and recognizing the opportunities it presents for businesses,” he added. We think that digital commerce has a lot of potentials, so Sendy will now focus more on developing fulfillment and delivery services for companies and put more time and money into it.
While its supply service, which has since been discontinued, made it simple for retailers to buy FMCGs directly from manufacturers, its fulfillment service offered storage, packaging, and delivery of items. Wasoko, Sabi, and TradeDepot are a few businesses that provide these services across Africa.
This action is a part of Alloys’ larger strategic initiative to concentrate on products that have a greater customer impact and address current and pressing market issues, the company said. Globally, the last several months have been difficult for entrepreneurs. Some companies in Africa have folded, like Kune, or are in danger of doing so, like Sky.Garden. Others, like Wave, have reduced salaries or laid off workers. Even if Sendy may be the first company in Africa to openly declare two rounds of layoffs.