Months after Sendy laid-off 10% of its workforce, the Kenyan logistics startup is at it again after sending more staff home, while announcing the decision to wind-down its Supply service.
Sendy confirmed to that discontinuing the supply service affected 20% of its staff, which is about 54 employees – the latest casualties of the funding slowdown fueled by macro economic headwinds. Besides, Sendy, which has pivoted to cater to businesses only, is yet to raise $100 million it had targeted to get this year.
On a call with employees, Alloys mentioned that Sendy was far off from the projections it made the previous quarter and changes needed to be made to hit the next ones. “If we look at metrics, we’re headed in the right direction, especially our contribution margins, gross profits, take rates and EBIDTA,” said Sendy CEO, Meshack Alloys, who co-founded the startup in 2015 with Kenyans Evanson Biwott, Don Okoth and American Malaika Judd.
“However, the gap between where we are today and where we’re supposed to be is still huge. To put that into context, if you look at the last three months from a GMV perspective, we’re only 65% of where we need to be. And from a revenue perspective and about 44%. So the gap is quite huge. And we need to do something about it given the tough economic conditions we’re seeing,” he said.
Alloys, while highlighting other reasons why the company is sticking with its fulfillment arm, said Sendy fulfillment a core product that had a bigger addressable market and, unlike its Supply product, wasn’t affected by price fluctuations.
“With the growing uptake of digital commerce and recognizing the opportunities it presents for businesses, we are doubling down on fulfillment to support online merchants with the necessary tools to sell and fulfill directly through digital platforms. We understand the potential of digital commerce, therefore Sendy will now sharpen its focus and invest resources in building fulfillment and transport services for businesses,” he said.
Its Fulfillment service offers storage, packing and delivery of goods, while the now abandoned Supply service made it easy for retailers to purchase FMCGs directly from manufacturers.
“This move is part of our wider strategic focus to consolidate efforts around solutions that impact more customers and speak to the current and immediate market challenges,” he said.
