Grace Ashiru
Copia Global, a Kenyan B2C e-commerce startup, has raised $123 million in venture funding across seven rounds but is now considering laying off employees or shutting down due to “uncertainties.” CEO Tim Steel, in an internal memo seen by TechCabal, highlighted the possibility of reducing the workforce, potentially affecting over 1,000 employees, and the risk of salary payments being at stake. This move comes despite the company’s announcement of extending its Series C round in December 2023.
Steel emphasized that layoffs would be the initial cost-cutting measure, with shutting down being a potential outcome if the financial challenges persist. Copia would then join other Kenyan e-commerce startups, such as Wefarm, an agritech startup connecting farmers to farm input distributors, and Zumi, a B2B platform connecting retailers to suppliers, which have ceased operations since the COVID-19 pandemic began.
Tim Steel, CEO of Copia, emphasized the presence of uncertainties ahead, indicating a possible reduction in the workforce and potential salary payment risks in an internal memo obtained by TechCabal.
Steel outlined that the initial step to address costs would involve laying off employees. Should this measure prove ineffective, the company might face closure, aligning with the fate of other Kenyan e-commerce startups like Wefarm and Zumi, which have ceased operations since the onset of the COVID-19 pandemic.
Attributing the closures to funding constraints, challenging market conditions, and fundamental issues within the business models, experts have pointed to factors such as insufficient industry data, inadequate infrastructure, and a deficit in customer trust.
In compliance with legal obligations, Steel noted that the company would provide all staff with a one-month notice of potential redundancies and initiate a one-month consultancy period for affected employees. Additionally, requisite notifications would be made to the Labour Officer as mandated by law.
Copia, one of Kenya’s most well-funded startups, secured a $50 million Series C funding round in 2022, followed by a $20 million extension in December 2023. Despite touting success in last-mile delivery, signs of strain emerged in 2023 with layoffs of over 700 employees and the closure of operations in Uganda. Facing economic challenges, Copia prioritized operational efficiency, reducing its workforce by 25%. It aimed to maintain profitability by optimizing processes and cutting costs, pausing expansion plans into other African markets. Founded in 2013 by Tracy Turner and Jonathan Lewis, Copia aimed to facilitate remote area customers’ access to goods through its platform and agent network.
