Months after Sendy laid off 10% of its workforce, the Kenyan logistics startup is at it again after sending more staff home as it announced the decision to phase out its Supply service.
Sendy confirmed to businesskinda.com that the shutdown of the delivery service affected 20% of its workforce, or about 54 employees — the latest victims of the funding slowdown fueled by macroeconomic headwinds. By the way, Sendy, which has only focused on businesses, has yet to raise $100 million it would have liked to get this year.
Speaking with employees, Alloys said Sendy was a long way from the forecasts it made the previous quarter and changes needed to be made to meet the next one. “Looking at metrics, we’re on the right track, 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 the American Malaika Judd.
“However, the gap between where we are now and where we should be is still huge. To put that into context, if you look at the past 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 big. And given the difficult economic conditions we’re seeing, we need to do something about it,” he said.
Alloys, while highlighting other reasons why the company is sticking to its fulfillment business, said Sendy fulfillment was a core product with a larger addressable market and, unlike its Supply product, was unaffected by price fluctuations.
“With the growing adoption of digital commerce and recognizing the opportunities it presents for businesses, we are doubling down on execution to support online merchants with the necessary tools to sell and deliver directly through digital platforms. We understand the potential of digital commerce, so Sendy will now sharpen its focus and invest resources in building fulfillment and transportation services for businesses,” he said.
The Fulfillment service provides warehousing, packaging 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 broader strategic focus to consolidate efforts around solutions that will impact more customers and address current and immediate market challenges,” he said.
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