KENYA- The board of e-commerce firm Copia Kenya has placed the company in administration as it seeks preservation and restructuring amid recent challenges in raising funding.
The board announced the appointment of Julius Ngonga and Makenzi Muthusi from the consultancy and auditing firm KPMG to handle the restructuring and administration process.
The startup failed to secure investment funding recently after raising more than US$123 million over eight funding rounds in the past few years. The funding challenges put the company’s operations and loss of 1,060 jobs.
The company’s inability to meet credit obligations from the previous funding rounds is the cause of the current funding woes.
“Copia Global, the parent company of Copia Kenya, was unable to attract capital on terms that were amenable to all existing stakeholders, funders, and investors. Copia Global is now winding down, leaving the Copia Kenya business in a new position to raise capital directly,” the company said in a statement.
Copia also reiterated that it expects the team responsible for administration and local management to come up with a plan that would lower expenses and fast-track the company’s trajectory back to profitability.
“Under the mandate of the Administrator, the Copia Kenya management team will implement a plan with a lower burn rate, an accelerated path to profitability, and a focus on the increasingly digital consumer,” the statement continued.
The administrator has the uphill task of securing funding from new investors amid a challenging capital market environment. Many startups in Kenya have shut down following a significant decline in funding from foreign and local investors.
The administration announcement is a culmination of months of financial troubles for the e-commerce firm.
The company announced plans to shut down its Uganda operations in late April. The move affected more than 350 jobs in Uganda. The company also concurrently announced it was pausing its Africa expansion plans.
“To accelerate Copia’s drive to profitability, the company decided to pause its Africa expansion plans and suspend its recently established Uganda operation through this period. The decision will enable Copia to focus all its resources on the operation in Kenya, enabling the business to achieve profitability faster,” the company said in a statement.
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