Logistics startup Sendy, which had raised over Sh2 billion in funding, has officially ceased operations and is in the process of liquidating its assets.
Sendy CEO Alloys Meshack confirmed the situation, and disclosed that it is currently undergoing an acquisition process.
“We are in the middle of an acquisition, so yes Sendy is being acquired. We will issue a formal joint statement in two weeks,” Alloys said to an online media, in what is a pointer to ongoings in the sector, especially for start ups that had demonstrated potential in the flourishing logistics sector
The company’s downfall follows successive staff layoffs last October, affecting 54 employees, followed by another wave in June when an additional 10 per cent were laid off. The layoffs were a direct consequence of Sendy’s inability to secure the necessary funding to sustain its operations.
High risks frontier
With investors suddenly wary of high risk frontier economies such as Kenya, funding for some start-ups have recently dried up, throwing a spanner into the world of start ups.
This comes on the back of a recent surge in the number of startups closing shop, starting with food tech venture Kune Foods that exited late last year. The others include Electric vehicle (EV) taxi brand Nopea, Kune Foods, Notify Logistics, Sky Garden and We Farm that exited, either partly or in full, after they failed to survive despite their rosy start and promising outlook.
Despite being valued at $80 million just last year, Sendy’s value plummeted to $40 million as it sought funding this year. This drastic decrease in valuation reflects the challenges the company encountered in maintaining investor confidence and its growth trajectory.
Founded in 2015, Sendy had successfully raised $26 million in funding over the years. The startup had positioned itself as an intermediary between retailers and manufacturers, facilitating direct purchases of fast-moving consumer goods (FMCGs). The platform aimed to streamline logistics and supply chain processes, benefiting businesses within the Kenyan market.
Sendy’s closure and subsequent asset sale offer a cautionary tale within the competitive startup landscape. The difficulties it faced in securing funding and continuing operations underline the importance of financial resilience and adaptability for startups in today’s dynamic market.
The fate of Sendy serves as a reminder of the unpredictable nature of the business environment, particularly for ventures heavily reliant on external funding.
As the logistics sector in Kenya and globally continues to evolve, Sendy’s journey offers valuable lessons for both entrepreneurs and investors, emphasizing the need to navigate challenges carefully and maintain agility in the face of changing circumstances.
