Kenyan Logistics Startup Sendy Ceases Operations and Explores Asset Sale: Insights and Implications
Sendy, a pioneering Kenyan logistics startup, known for its innovative approach of enabling retailers to directly purchase Fast-Moving Consumer Goods (FMCGs) from manufacturers, is undergoing a significant transition. Recent reports reveal that the company is in the process of shutting down its operations and actively exploring the sale of its valuable assets. This development has drawn attention due to its potential impact on the broader Kenyan logistics landscape and the realm of B2B e-commerce.
Founded in 2015 by Meshack Alloys, Evanson Biwott, Don Okoth, and Malaika Judd, Sendy has raised a total of $26.5 million in disclosed funding from a range of investors, including Toyota Tsusho, Atlantica Ventures, VestedWorld, Keppel Capital, Enza Capital, AAICA Investment Pte Ltd, Sunu Capital, and Goodwill Investments.
Meshack Alloys, one of the co-founders of Sendy, confirmed the impending sale of the company’s assets during a conversation with TechCrunch. While specific details have not been disclosed at this juncture, Alloys indicated that an official statement regarding the acquisition will be released in the coming two weeks. Consequently, there is a temporary limitation on the divulgence of further information.
Multiple sources familiar with the situation have revealed that Sendy faced financial challenges in recent months, culminating in an exhaustion of funds approximately two months ago. Over the past year, the company has been diligently implementing cost-cutting measures to navigate these challenges and sustain its operations. As part of these efforts, Sendy previously announced a 10% reduction in its workforce in July, attributing the decision to the prevailing global circumstances impacting technology companies. Subsequently, Sendy underwent additional workforce reductions and strategic changes, such as discontinuing a product line and exiting a particular market.
In light of these difficulties, Sendy’s trajectory offers insights into broader trends observed within the B2B e-commerce sector. Many companies in this domain initially experienced rapid growth, attracting substantial investments and expanding their market value. However, operational costs and pricing challenges have presented significant hurdles. Sendy’s journey mirrors this pattern, with its recent struggles prompting a reassessment of its financial strategy.
Last year, Sendy had set its sights on securing $100 million in funding, a goal that was only partially met through a contribution from MOL PLUS, the corporate venture capital arm of Japanese transport company Mitsui O.S.K. Lines. Despite this, Sendy continued to explore avenues for bolstering its financial standing, including pursuing fresh capital and potential buyers. Unfortunately, these endeavors proved to be complex.
Having been valued at over $80 million in late 2022, Sendy engaged in negotiations with various investors earlier this year to raise additional capital. However, due to evolving circumstances, the negotiations resulted in a valuation ranging between $40 million and $60 million. Ultimately, one of Sendy’s key investors withdrew from the deal, leaving the company in a financially constrained position for the past few months, including difficulties in covering employee salaries. In response, Sendy is taking steps to liquidate certain assets to address its financial challenges.
The process of asset sale presents its own set of challenges, primarily linked to finding suitable buyers. According to insiders familiar with the situation, Sendy has been engaging in discussions with several African companies operating in the B2B e-commerce and trucking sectors. These discussions revolve around the potential sale of various assets, encompassing technological infrastructure and fulfillment operations. Companies like Trella, Sabi, Wasoko, as well as Sendy’s own investors, are reportedly part of these discussions. While the outcome remains uncertain, these conversations may lead to acquisitions or other strategic partnerships.
As Sendy navigates this transition, it’s worth noting that over 200 employees are anticipated to be affected by the company’s closure. This situation underscores the broader impact of such decisions on the workforce and local economy.
