Following its inability to secure venture capital, Kenyan e-commerce startup, Sky.Gardens the company has laid off some of its employees stating that "the company was running out money and will close down on October 16, 2022," according to TechCrunch.
Responding to the details contained in the termination letter of the company's employees, Sky.Garden's co-founder and CEO, Martin Majlund said that the company is still operational—we confirmed this as the website is still live and marketing content is still been shared across its social media handles—as of the time of this report, the company made a tweet by 14:00 PM (WAT) on September 29, 2022.
"We are in dialogue with potential investors and acquirers but as we have to be diligent about doing things the right way, we chose on September 16th to give our staff 30 days’ notice while working on our opportunities," Majlund said. He further noted that "Rising prices, inflation, the war in Ukraine and increased interest rates have made the venture capital space very challenging, especially being a B2C eCommerce business,"
"We have therefore for a while been in deep M&A conversations. But we are not the only ones being hurt by the macro-economic contractions which have had a negative implication on the timeline of these conversations leaving us in the above-mentioned situation," he added.
Building a brand requires capital — Martin Majlund
In June 2021, Sky.Garden announced the close of a $4 million round of Series A funding to accelerate its growth, adding to its $1.2 million seed fund in 2018, the e-commerce startup raised $5.2 million since its launch in May 2017. The company has a software-as-a-service (SaaS) platform for mobile commerce that is built specifically for African businesses.
"This was the mindset with which we started Sky.Garden. We wanted to help vendors onboard their products, and sell to their existing customers and Sky.Garden would take care of delivery and payments," Majlund said.
Sky.Garden is reportedly a well-known brand in cities like Nairobi, delivering purchased goods within 24 hours. 46 individuals are currently identified as employees of the company on LinkedIn. As of 2021, Sky.Garden onboarded more than 20,000 vendors, only 7000 were active.
If the e-commerce startup shuts down by October, it will join Kune Foods, another Kenyan startup that closed its operations in June 2022 after failing to raise funds to keep up operations—the same challenge as Sky.Garden's.
Editor's Note: This is a developing story, we will update it with more details.