The Kenyan business-to-business (B2B) e-commerce startup Zumi has shut down because it was unable to get sufficient funds to continue business as usual.
Zumi, which debuted in 2016, was initially a digital magazine geared towards women; however, in 2020, the publication will be discontinued, and the company will transition into an online shopping platform. The end-to-end marketplace served to link merchants and suppliers while also acting as a facilitator for the entirety of a transaction that involved both parties, including payments and logistics.
According to William McCarren, co-founder and CEO of the company, the firm was able to accomplish revenues of more than US$20 million, recruit 5,000 customers, and build a workforce of 150 people; however, the company is now poised to shut down since it was unable to get finance.
McCarren said, “The current macro environment has made fundraising extremely difficult, and unfortunately, our business was not able to achieve sustainability in time to survive.”
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Previous Update on Zumi
The startup launched in 2016 as a digital magazine geared towards women, but it went out of business not long after it announced its intention to shift its focus to online shopping. It was stated that the United Arab Emirates-based Majlis investment and a few other investors had provided the digital media startup with approximately $250,000 in finance. Yet they were having trouble due to low revenue from digital advertisements, a challenge that is prevalent among organisations that deal with digital media. Due to a lack of available funds, it had to be closed.
It wasn’t for very long that Zumi’s retail location was out of commission since by the year 2020, the company had reinvented itself as a business-to-business (B2B) e-commerce platform that supports the growth of both retailers and suppliers, particularly in the garment industry. Zumi took care of everything; it was responsible for facilitating the online sale or purchase of the product, as well as the delivery and payment. Customers were able to place orders with retailers or suppliers through the Zumi app or with the assistance of a Zumi agent. They made sure that the goods were delivered to the customer by forming partnerships with companies that provided logistics services. The buyer subsequently made the payment upon receiving the goods.
Zumi Through the years
During the course of several years, Zumi developed popularity and was able to secure more money from Masha Ventures and other investors including Zephyr Management. Since its establishment in 2016, Crunchbase reports that Zumi has accumulated approximately $970,000 in publicly known funding. Achieving revenues of over $20 million and gathering 5,000 customers were Zumi’s crowning achievements before the company was shut down.
In a post that he made on LinkedIn, McCarren extended his thanks to his four co-founders, Mohamed Nuur, Sabrina Dorman, Tomas Rosales, and Eric Njogu, for their participation and support throughout what he refers to as a “crazy trip.”
The closure of this company adds to the growing number of Kenyan start-ups that have been attributed to widespread economic issues. This past year saw the demise of three Kenyan start-up companies: Kune Foods, Alert Logistics, and WeFarm.