Copia Global, a B2C e-commerce platform and the parent company of Copia Kenya has entered administration one week after a TechCabal report revealed the company was considering shutting down. The startup has appointed Makenzi Muthusi and Julius Ngonga of KPMG, an audit and advisory firm, to manage the administration process, per a statement shared with TechCabal.
Copia Global, which raised $123 million across eight funding rounds, failed to secure new funding, putting its operations and over 1,000 jobs at stake. The firm said on May 24 that the administrator will work to raise funding for Copia’s Kenyan unit.
“Copia Global, the parent company of Copia Kenya, was unable to attract capital on terms that were amenable to all existing stakeholders, funders, and investors. Copia Global is now winding down, leaving the Copia Kenya business in a new position to raise capital directly,” Copia said in a statement sent to TechCabal.
Copia will lay off an unspecified number of employees to “create a position for growth”, the company said. On May 16, Copia’s CEO Tim Steel told employees that over 1,000 staff could be laid off.
Also as part of the cost-cutting, Copia Kenya will stop physical order processing and replace it with an online fulfillment model through its mobile app.
“Under the mandate of the Administrator, the Copia Kenya management team will implement a plan with a lower burn rate, an accelerated path to profitability and a focus on the increasingly digital consumer,” said Copia.
Copia was founded by Tracey Turner and Jonathan Lewis in 2013 to allow customers in remote areas to order goods through its platform and delivered to them through its network of agents.
The company said that it was struggling to meet its obligations like paying salaries, forcing it to close shops after 10 years. Signs that the business was straining started to show in 2023. At its peak, the company had 1,800 employees and a network of 50,000 agents in Kenya and Uganda.
In July 2023, Copia cut its operations and laid off 350 staff. Earlier in the year, it had reduced the headcount by 50 employees in what the company called a drive to keep down labour costs while eyeing profitability.
Copia also closed down the Uganda base, barely two years after setting shop in the country, and rolled back its ambitious expansion plan that would have seen the company set shop in Nigeria, Ghana, South Africa, and Mozambique.
Copia joins a growing list of well-funded Kenyan ventures that have closed shop after failing to raise fresh capital like Wefarm, an agritech startup connecting farmers to farm input distributors, and Zumi, a B2B connecting retailers to suppliers. Others like Sendy and iProcure are under administration while Twiga Foods and Markertforce are teetering, hoping for fresh investors’ confidence.
Copia, alongside Twiga Foods ($186 million) is Kenya’s most funded e-commerce platform.
The shutdown is a big blow to Tim Steel, Copia CEO, who took over from the co-founder Tracy Turner in 2017. Steel told a Kenyan newspaper in 2023 that he is dedicated to making Copia a success.
“I think I fear not succeeding with Copia. Not turning it into that billion-dollar company. Having invested so much time, effort, blood, sweat, and tears into it,” Steel told Business Daily in June 2023.
*This is a developing story.
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Copyright for syndicated content belongs to the linked Source : TechCabal – https://techcabal.com/2024/05/24/copia-enters-into-administration-after-failing-to-secure-funding/
