Months after Sandy laid off 10 percent of its workforce, a Kenyan logistics startup is announcing the decision to end its delivery service after sending more workers home.
Sendy confirmed to TechCrunch that the outage has affected 20% of its workforce, roughly 54 employees — the latest casualty of the funding cuts due to macroeconomic headwinds. In addition, Sandy, which started out solely to handle businesses, has yet to hit the $100 million it plans to earn this year.
In a call with staff, Alois Sandy mentioned that it was far from his forecast last quarter and that changes needed to be made to hit the next quarter. “Looking at the metrics, we are heading in the right direction, especially our contribution margin, gross profit, payout and EBDTA,” says Sendi CEO Meshack Alois, who co-founded the startup with Kenyan Evanson Biwot in 2015. Don Aucott and American Malaika Judd.
“But the gap between where we are today and where we should be is still huge. To put that into context, if you look at the last three months in terms of GMV, we’re only 65% of where we should be. And in terms of income and about 44%. So the gap is very big. And given the strong economic conditions we’re seeing, we have to do something, he said.
Alois, while highlighting other reasons why the company is sticking with its response arm, is that Sendy Fulfillment is a core product with a large addressable market and, unlike its delivery product, is not affected by price fluctuations.
“Recognizing the growth of digital commerce and the opportunities it presents to businesses, we are doubling down to support online merchants with the necessary tools to sell and fulfill through digital platforms. We recognize the potential of digital commerce, so Sendy now focuses on investing in building fulfillment and transportation services for businesses.”
The end-to-end service provides storage, packaging and transportation of goods, while the now-defunct delivery service made it easier for retailers to purchase FMCGs from manufacturers. Some companies that offer such services across Africa include Wasoko, Sabi and Tradedepot. “This move is part of our broader strategic focus to strengthen efforts around solutions that touch more customers and address current and urgent market challenges,” Alois said.
It’s been a tough few months for startups globally. In Africa, some startups such as Kun have closed and faced closures such as Sky.Garden, while others have laid off staff or implemented wage cuts such as Wave, 54gene and Vezeeta. While Sandy may be the first startup in Africa to officially lay off employees twice, it’s a common theme among global startups. Robinhood, Gemini, On Deck and Hopin are a few examples.