Copia Global, a prominent B2C e-commerce platform and the parent company of Copia Kenya, has entered administration just one week after a report by Launch Base Africa indicated the company was considering shutting down. The startup has appointed Makenzi Muthusi and Julius Ngonga of KPMG, an audit and advisory firm, to oversee the administration process, according to a statement from the company.
Copia Global, which successfully raised over $100 million across eight funding rounds, has been unable to secure new funding, putting its operations and over 1,000 jobs at significant risk. The firm announced on May 24 that the administrators will focus on managing Copia’s Kenyan unit.
“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,” Copia said in a statement.
The financial instability has been looming over Copia for some time. On May 16, 2024, Copia notified its 1,060 employees of potential layoffs and the imminent risk of a business shutdown. In a notice obtained by Launch Base Africa, CEO Tim Steel outlined the company’s struggles and the potential impact on its workforce. The notice, issued in compliance with Section 40 (1) (b) of the Employment Act, 2007, highlighted the necessity for organizational restructuring to attempt to salvage operations.
Copia Global’s ongoing financial challenges have forced the company to contemplate significant restructuring or even complete shutdown. Despite management’s efforts to secure additional funding, they have been unsuccessful, leaving the future of the company and its employees in jeopardy. Employees were cautioned about the uncertainties ahead, including the possibility of disruptions in salary payments.
The company underscored its legal obligation to provide a one-month notice period for potential redundancies and a corresponding consultation period with affected staff. Should the restructuring be implemented, approximately 1,060 positions could be eliminated. In the event of a complete shutdown, all employees would face termination.
During the notice period, Copia assured its commitment to fulfilling statutory obligations regarding consultation and selection processes. Employees were encouraged to contact Human Resources for any inquiries regarding their employment situation.
The administration development comes after Copia Global’s recent success in securing a $20 million Series C extension round in December last year. Notable contributors to this funding round included Enza Capital, co-founded by former Metaswitch CEO John Lazar, along with LGT, Goodwell Investments, DFC, DEG, Elea, Perivoli Foundation, and Sorenson Foundation. This investment was intended to bolster Copia’s efforts in serving mid- and low-income African consumers in rural areas through its e-commerce and fintech platform.
Investors cited several reasons for their support, including the anticipation of a surge in African consumer spending, Copia’s operational resilience facilitated by its extensive network of local agents, strategic alignments, and the startup’s shift towards a profitability focus in its home market of Kenya.
Founded a decade ago, Copia has been dedicated to addressing the challenges faced by rural consumers in accessing goods and services.
Previously, Copia had experienced significant growth, boasting a 100% annual growth rate. The company’s strategy focused on leveraging a network of over 50,000 local agents to provide essential goods and services to mid- and low-income consumers in rural areas. This hyperlocal approach aimed to address specific challenges faced by these consumers, such as limited access to products and unreliable services.
However, the current financial constraints threaten Copia’s future. The company’s ability to navigate these challenges and potentially achieve profitability in Kenya remains uncertain. The potential job losses for over 1,000 employees cast a shadow over Copia’s future and its impact on the communities it serves.
To date, Copia has raised over $100 million in funding from its inception until the Series C extension round in 2023. The Copia Kenya’s future now hinges on the administration process and its efforts to secure necessary funding to sustain its Kenyan operations.