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Copia Global, an e-commerce platform and the parent company of Copia Kenya has entered administration, in what is another major hit to start ups funded by venture capitalists.

In its wake, in excess of 1,060 workers will be fired due to lack of new capital required for its operational sustainability, bringing to the fore the growing challenges being faced by entrepreneurs in the country.

The company that has been serving low and middle-income customers through a network of agent seeks to action organizational re-structuring to ensure the sustainability of its operation and or a possible shutting down of its operations.

Uncertain times ahead

In a notice dated May 16, 2024, the company’s CEO Tim Steel (pictured) termed the future of the company as uncertain and urged workers to undertake a one-month consultancy period.

“It is very likely that there will be a reduction of our workforce and it is possible that the payment of salaries could be at risk. The company is required – in compliance with the law — to give all staff one month notice of potential redundancies and to undertake a one-month consultancy period with all potentially impacted staff,” Steel said in the letter.

The firm which has gobbled up in excess of Sh15.4 billion in seed capital was founded by Tracey Turner and Jonathan Lewis as a B2C e-commerce platform to serve Africa’s middle- and low-income African consumers.

The e-commerce company focuses on customers in rural areas that struggle to access the same goods and services in terms of choice, price value and reliability that similar consumers in urban areas or of higher income levels can access.

Some of the investors in Copia include Koa Labs, Goodwell Investments, German Investment Corporation (DEG), Perivoli Innovations,Lightrock, Zebu Investment Partners and  U.S. International Development Finance Corporation.

Copia joins a growing group of financially crippled companies that have either shut down their operations in the country and or have restructured, sending hundreds of workers to desolation.

The backdrop of Copia’s current predicament is framed by its notable performance and funding history.

The company was established as a solution to serve mid- and low-income consumers in rural areas garnering attention for its innovative approach.

Growing list

With a network of over 50,000 local agents, the firm has served over 2 million consumers and fulfilled over 13 million orders, reflecting its penetration into underserved markets.

The company’s downfall joins a growing list of companies such as Twiga Foods and Kune Food that laid off all or a substantial part of their workforce amid losses and inability to raise additional capital.

With increased appetite for new taxes from business enterprises to facilitate payment of debts, development and recurrent expenditures, the number of young companies sent into the graveyard in the country may continue to increase this year.

The logistics sector in Kenya and globally continues to evolve, but in these closures, valuable lessons for both entrepreneurs and investors abound, emphasizing the need to navigate challenges carefully and maintain agility in the face of changing circumstances.