Amidst the vibrant tapestry of Kenya’s entrepreneurial landscape, Sendy, a pioneering logistics startup that paved the way for direct acquisitions of fast-moving consumer goods (FMCGs) from manufacturers, is caught in a tempest of turmoil. Reports have emerged that the company is in the process of shutting down its operations and is actively exploring options to sell its assets. This news comes as a blow to the startup ecosystem, where Sendy had once shone as a rising star.

“We are currently undergoing an acquisition process. Yes, Sendy is in the process of being acquired. A formal joint statement will be issued within the next couple of weeks. At this time, we are unable to share further specifics,” Meshack Alloys, one of the co-founders of Sendy, was quoted as saying, although details remain scarce. The company’s fate hangs in the balance as the acquisition process unfolds.

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Sources close to the matter reveal that Sendy’s financial troubles had been escalating for the past year, culminating in a severe cash shortage two months ago. In a bid to stay afloat, the company initiated a series of cost-cutting measures, including a 10% reduction in its workforce last July. This move was attributed to the “current realities impacting tech companies globally.” However, the situation deteriorated further, leading to more workforce reductions, the discontinuation of a product line, and a strategic exit from a market. Last October, Sendy had to lay off 54 employees and wind down its supply service. This February, it made the difficult decision to withdraw its end-to-end fulfillment offering from the Nigerian market, a market it had entered with optimism two years prior.

These struggles reflect a broader trend among B2B e-commerce ventures, which initially experienced substantial growth and secured significant funding but later faced challenges related to operational costs and customer pricing dynamics.

Sendy’s aspirations to secure $100 million in funding last year remained unfulfilled. Instead, it secured a smaller portion from MOL PLUS, the corporate venture capital arm of Japanese transportation giant Mitsui O.S.K. Lines. Following this deal, Sendy embarked on a desperate quest to stabilize its business, exploring various avenues such as securing fresh capital and seeking potential buyers. Unfortunately, these efforts bore little fruit.

As of late last year, Sendy’s valuation exceeded $80 million. However, in its search for additional capital, the startup was forced to consider a valuation ranging from $40 million to $60 million. A crucial investor eventually withdrew from the negotiation, compounding Sendy’s financial woes over the last two to three months. This dire situation has even impeded the company’s ability to cover employee salaries, resulting in the current attempt to offload some of its assets.

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The options for potential buyers appear to be limited. Reliable sources within the company have disclosed that Sendy has entered discussions with several African firms operating within the B2B e-commerce and trucking sectors. These discussions involve companies like Trella, Sabi, Wasoko, and even one of Sendy’s own investors. The aim is to offload various assets, encompassing both technological infrastructure and fulfillment operations. However, it remains uncertain whether any of these negotiations will culminate in a deal. The talks are ongoing, and the outcome could potentially involve an acquisition, as suggested by Sendy’s management. Regrettably, over 200 employees will bear the brunt of the startup’s impending closure.

Sendy was established in 2015 by a group of visionary entrepreneurs, including Meshack Alloys, Evanson Biwott, Don Okoth, and Malaika Judd. Over its journey, the company amassed $26.5 million in disclosed funding from diverse investors, including prominent names such as Toyota Tsusho, Atlantica Ventures, VestedWorld, Keppel Capital, Enza Capital, AAICA Investment Pte Ltd, Sunu Capital, and Goodwill Investments. Now, as the company navigates these tumultuous waters, the future of Sendy hangs in the balance, with the once-promising logistics disruptor faced with an uncertain fate.

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Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. 
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard