Twiga Foods issues fresh layoff notice to 59 employees

KENYA – Twiga Foods, a Kenyan-based agri-tech startup, has issued notice for another fresh round of layoff targeting 59 employees.

The ailing e-commerce company explains that this second head count aims at helping it enhance “operational efficiencies” and accelerates towards profitability.

“These changes are crucial as Twiga accelerates towards profitability and continues its mission of revolutionising food distribution in Africa through innovative digital solutions,” said the firm in a statement.

To further stimulate progress to its ambition of prosperity in the current market and financial conditions, Twiga Foods will hire 25 new staff members in its growth and innovation department.

The company, which has raised over KES 25 billion (USD 193.1 million) in funding over the past decade, has struggled with cash flow issues, leading to delays in paying salaries and suppliers.

In 2022, the company’s layoff affected 21 percent of its then staff, which was about 210 employees.

The same financial challenges came to a head earlier this year when Twiga became embroiled in a legal battle with Incentro, a Google cloud services reseller, over an unpaid bill of USD 261,000.

The lawsuit not only exposed the startup’s financial struggles but also brought to light broader issues related to its ability to manage vendor relationships and maintain its workforce.

Due to persisting challenges late last year, the startup was unable to pay its monthly obligations, prompting Incentro to file a lawsuit against them. The court mandated that both parties had until March this year to resolve their debacle.

Although the company was able to sort out its liquidation dispute with Incentro, raising funds and achieving profitable growth has been a challenge.

It the same month of March 2024, amidst these growing challenges, Twiga’s founder and CEO, Peter Njonjo, left his position following a successful USD 35 million fundraising round through convertible bonds.

The company later appointed former executive at Jumia, Charles Ballard. Market analysts argue that Twiga Foods’ woes, if not miraculously placated, will likely drown the company into the same ocean as its erstwhile e-commerce peers, Sendy and Copia.

The firm is looking forward to securing valuable partnerships and viable business models that would minimize the burn rate and resuscitate investor trust.

It will also be doubling down on its core business of digital food distribution, particularly focusing on fresh produce for the general trade market.

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