Kenyan agri-tech startup iProcure has been placed under administration due to undisclosed debts being unpaid.
Launched in 2013, iProcure has developed its own distribution infrastructure, connecting major agricultural input suppliers directly to local agro-dealers via its proprietary distribution technology system.
By cutting out the multiple levels of middlemen in the traditional agricultural supply chain and providing technology-driven insights on supply levels and price, iProcure ensures the availability, quality, and delivery of critical agricultural inputs like fertilizers and seeds at up to 25 per cent discount from prevailing market prices.
The startup has raised a total of US$17.2 million in debt and equity funding, including a US$10.2 million Series B round in 2022, led by Investisseurs & Partenaires (I&P) with participation from Novastar Ventures, British International Investment (BII), and Ceniarth.
Also backed by Safaricom’s Spark Venture Fund, iProcure expanded to Tanzania last year, but it has become one of the latest victims of the global economic crisis, and resultant “funding winter”, and been placed under administration.
The advisory arm of global consulting firm KPMG has been appointed administrator, with the company’s Makenzi Muthusi taking control of iProcure’s offices, assets, and operations, and managing all claims from creditors.
“Following the appointment, all the affairs and business and properties of the company are being managed by the Administrator. The directors of the company no longer have any power or authority to deal with these matters,” KPMG said in a notice.
“Any party having a claim against the company should submit their claim in writing, with relevant supporting documentation to the Administrator on or before May 14 2024 for consideration.”
The legal process of being put under administration provides a financially-challenged company with “breathing space”, freeing it from creditor enforcement actions while any possible financial restructuring takes place to rescue the company as a going concern, where possible.
This may take the form of a sale to an unrelated party, but if the company cannot be reasonably saved, the administrator will aim to achieve a better return for creditors than would be likely if the company were wound up without first being in administration. If an administrator fails to revive or sell the company, it will consider liquidation as a final resort to ensure creditors recover at least some of their money.
iProcure is the latest African tech venture to feel the heat in the current global capital shortage. A host of startups have already closed their doors, while pressures remain on many others. Kenyan retail-tech startup MarketForce, for example, was recently forced to close down its B2B e-commerce platform RejaReja in the light of failing to adequately scale it given the global “funding winter”.
