Copia Global, a prominent Kenyan B2C e-commerce startup, is facing significant operational challenges that may lead to drastic measures, including potential layoffs or a complete shutdown. With $123 million raised in venture funding across seven rounds, Copia has been one of Kenya’s most well-funded startups. However, the company is now grappling with severe uncertainties that threaten its future.
In an internal memo, CEO Tim Steel highlighted the impending challenges, indicating that workforce reduction is likely as the company navigates these turbulent times. “It is important to highlight that uncertainties lie ahead. As a result, it is very likely that there will be a reduction in our workforce, and it is possible that the payment of salaries could be at risk,” Steel stated. He underscored that layoffs would be the first step in cost-cutting efforts, with a complete shutdown as a possible last resort.
This news follows Copia’s announcement of a $20 million extension to its Series C round in December 2023, aimed at stabilizing the company amid ongoing financial strain. Despite previous successes, including a $50 million Series C round in 2022, Copia has struggled to maintain its operational footing. The company had already laid off over 700 employees and ceased its Uganda operations in 2023, marking early signs of financial distress.
The economic downturn and tight capital markets have exacerbated Copia’s challenges, forcing the company to adopt a strategy focused on optimizing operations and maximizing existing resources. This included a 25% workforce reduction, impacting 350 employees, as part of efforts to streamline processes and reduce costs. Plans to expand into other African markets, such as Nigeria, Ghana, South Africa, and Mozambique, were also suspended in a bid to drive profitability.
Experts suggest that the issues faced by Copia and other Kenyan startups, such as Wefarm and Zumi, are not solely due to funding shortages and market conditions. The viability of business models, lack of industry data to guide expansion, inadequate infrastructure, and a deficit in customer trust are also significant contributing factors. These underlying challenges have prompted multiple e-commerce ventures to close since the COVID-19 pandemic.
In compliance with Kenyan law, Copia has issued a one-month notice of potential redundancies to all staff and will undertake a consultancy period with those affected. A notice will also be provided to the Labour Officer as required.
Founded in 2013 by Tracy Turner and Jonathan Lewis, Copia aimed to revolutionize access to goods for customers in remote areas through its innovative last-mile delivery system and agent network. Despite its early success and ambitious goals, the current financial and operational hurdles highlight the fragile nature of e-commerce ventures in the region.
