Within two months, Kenyan startup, Sendy reduces its workforce by 30%

Economic downturn is hitting African startups hard, Sendy has laid off 20% of its employees—its second layoff within two months.

Within two months, Kenyan startup, Sendy reduces its workforce by 30%
Sendy has laid off 30% of its staff within 2 months

Sendy, a Kenyan startup that makes e-commerce in Africa easier, has announced that it is shutting down one of its products, Sendy Supply and also laying off 20% of its staff.

Sendy Supply, the product which was initially built to make it possible for retailers to purchase affordable stocks directly from multiple manufacturers and distributors, will be paused as the startup shifts its focus to its other product, Sendy Fulfilment.

This move is coming barely two months after the startup laid off 10% of its then 300 staff as a result of “current realities impacting tech companies globally.” The shift in business model will see Sendy let 54 staff, or 20% of its current 270 workforce, go.

The Nairobi-based startup in 2021, on Bloomberg, had sought to raise $100 million to boost its expansion and improve trade efficiency in African countries such as Egypt, Ghana, South Africa and Nigeria.

In January 2020, Sendy raised $20 million Series B which was backed by Toyota Tsusho Corporation, Atlantica Ventures, Enza capital and Asia African investment to expand and become competitive in West Africa logistic industry.

Sendy was founded in 2015 by Mesh Alloys, Evanson Biwott, Don Okoth and Malaika Judd, to connect clients to drivers and vehicles for goods delivery.

Speaking on the startup’s decision and announcement, co-founder and CEO, Mesh Alloys, the move will “consolidate efforts around solutions that impact more customers and speak to the current and immediate market challenges. With the growing uptake of digital commerce and recognising the opportunities it presents for businesses, we are doubling down on (Sendy) Fulfilment to support online merchants with the necessary tools to sell and fulfil directly through digital platforms.”

Sendy Fulfilment is one of the startup’s products which enables ecommerce businesses to store and distribute their products. This streamlines the startup’s entire product line to Sendy Transport and Sendy Fulfilment.

Mesh continued, “our path forward is to aggressively grow our core business, Sendy Fulfilment, through deepening customer value. We believe that this consolidated service offers a massive opportunity in solving challenges that businesses, large and small, face with warehousing, packaging and last mile delivery.”

Global downturn is hitting African startups hard

2022 has been a challenging year for startups globally. Rising prices, inflation, the war in Ukraine and increased interest rates have made attracting venture capital a herculean task for most startups.

The global downturn, which was predicted by Y Combinator in May 2022 is hitting African startups hard. There’s been a number of shutdowns, lay-offs and staff pay cuts across the African tech ecosystem.

In June 2022, Kune Foods, a Kenyan-based cloud kitchen that offered ready-to-eat affordable meals, closed down its operations. Sky.Garden another Kenyan startup has announced that it will shut down operations by October 16.

MarketForce, a Y Combinator-backed end-to-end informal merchant distribution platform,  which raised $40 million in a debt-and-equity Series A round in February 2022, laid off 9% of its workforce in July.

Wave, the African francophone fintech unicorn, had also cut off 15% of its workforce in July 2022. GetEquity, the Nigerian startup democratising angel investing, took another approach to the situation. Rather than lay off its employees, the startup slashed salaries by 30-50% to reduce costs and stay afloat.