- Data by the Registrar of Companies indicated that 2,540 entities were closed in 2021, 1255 more than in 2020
- Kune Food shut down in June 2021, barely two years after its launch over high operation costs despite raising over KSh 120 million
- Wasoko, founded by Daniel Yu, relocated to Zanzibar over high taxes in Kenya after it was ranked Africa's fastest-growing company
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Over 70% of Kenyan startups fail to celebrate their third anniversary.
Source: Facebook
Data by the Registrar of Companies indicated that 2,540 entities were closed in 2021, 1255 more than in 2020.
Starting and running a successful venture isn't for the faint-hearted, as startups that raised millions collapsed a few years after they were launched.
Which Kenyan startups collapsed and why?
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1. Kune Food
Kune Food was founded by Robin Reecht in 2020. It promised to deliver 'great food at a cheap price'.
However, the company shut down in June 2021, barely two years after its launch.
Despite raising over $1 million (KSh 120 million) in pre-seed funding, it collapsed over high operation costs, with over 90 employees losing their jobs.
Reecht explained that selling food at $3 (KSh 360) wasn't sustainable for its growth.
"We were unable to raise our next round. Coupled with rising food costs deteriorating our margins, we just couldn’t keep going," Capital FM quoted him.
2. Notify Logistics
Notify Logistics co-founded by Waweru Nderitu announced the closure of its operations in Nairobi on August 30, 2022, citing the high cost of operation.
The company, which started five years ago, dealt in the shelf-renting business to help other small and medium enterprises cost share rent.
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“Dear vendors, we regret the closure of Notify Mall in Moi Avenue, Nairobi. We request all vendors to stock out their operations on Monday and Tuesday, August 30 being our last day. Sorry for any inconveniences caused,” it stated.
Its director Hellen Nyambura noted that the start-up used to pay KSh 800,000 per month for the three stalls in Nairobi.
3. WeFarm Shop
The Agritech company was founded in 2014 by Kenny Ewan.
Barely a year after it set up an app dubbed WeFarm shop, it announced its closure.
The company's director of growth Sofie Mala said they closed shop due to difficult market conditions.
"We have taken the difficult decision to discontinue one of our services: WeFarm shop. While our shop has seen incredible demand and growth over the past nine months, current market conditions make this avenue difficult to set up and scale," CIO Africa quoted her.
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4. Wasoko
Wasoko, founded by Daniel Yu, relocated to Zanzibar over high taxes in Kenya.
As of March 2022, the company was valued at $625 million (KSh 75.6 billion).
The e-commerce was founded in 2016 and provides free delivery and financing of essential goods to local retailers.
In 2020, its revenues rose to $ 27.447 million (KSh 3.1 billion ), up from KSh 35.9 million in 2020. As of 2020, the company employed 372 people from 57 in 2017.
The Financial Times ranked it as the fastest-growing company in Africa in 2022.
5. Sky Garden
In September, Sky Garden founder Martin Majlund sent termination notices to employees over a cash crunch.
The firm, which operates like Amazon, was in talks with investors for acquisition.
Kenyan family businesses that collapsed
In related news, TUKO.co.ke reported about Kenyan family business empires that crumbled and the reasons behind their much-publicised collapse.
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Once giant retailer, Tuskys, lost its tusks two decades after the death of founder Joram Kamau.
Nakumatt, on the other hand, was liquidated in January 2020 after experiencing financial woes attributed to huge debts and mismanagement.
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Source: TUKO.co.ke
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