Kenyan e-commerce start-up Copia has announced that 1,060 jobs are at risk of redundancy due to ongoing financial constraints and difficulties in securing additional funding.
Founded in 2013 by former Silicon Valley experts Tracey Turner and Jonathan Lewis, Copia provides a business-to-consumer (B2C) platform catering to rural, middle to low-income consumers. The platform enables these consumers to order products conveniently delivered by local agents.
In a letter to staff dated May 16, Copia revealed plans for a significant organizational restructuring as part of efforts to secure capital and sustain operations. The company also warned of a potential shutdown if financial challenges continue.
“Despite our best efforts to navigate this challenge and explore avenues for additional funding, we find ourselves in a position where we must consider a far-reaching organizational restructuring to ensure the sustainability of our operations or even a possible shutting down of operations,” the start-up stated.
The company highlighted the uncertainties ahead, indicating that workforce reductions were likely, and salary payments could be at risk. Copia provided a one-month redundancy notice to employees in accordance with local labor laws.
“If the company implements a restructuring, about 1,060 roles could be eliminated from the company’s structure… If operations are shut down, all staff will be at risk of being terminated,” Copia stated.
Copia’s business model relies on digitally-enabled, locally-based agents who act as order and delivery points, meeting consumers both online and offline. These agents are trusted local shopkeepers, such as grocers or butchers, where customers can select and pay for products from a Copia catalogue. Once an order is placed, Copia sends an SMS confirmation to both the agent and the customer and delivers the products to the agent within two days for customer pickup.
This announcement comes just five months after Copia secured Ksh.2.6 billion ($20 million) in a Series C extension round led by Enza Capital. Other investors in the December 2023 round included global private bank LGT, investment firm Goodwell Investments, the U.S. International Development Finance Corporation (DFC), German financial service provider DEG, Swiss impact fund Elea, Perivoli Foundation, and Sorenson Foundation.
In July of the previous year, Copia laid off about 25% of its workforce, impacting approximately 350 of its 1,800 employees at the time. The start-up cited the economic downturn and constrained capital markets as reasons for the operational restructuring then.
Copia’s current financial struggles highlight the challenges faced by start-ups in maintaining sustainability amidst economic uncertainties.
