B2C e-commerce company Copia Global, the parent company of Copia Kenya, has entered administration after failing to secure the necessary capital to continue operations.
Launched in 2013, Copia combines technology and a network of local agents to offer a broad product offering and efficient, reliable delivery to “base of the pyramid” consumers. Its service enables rural households to access goods that would otherwise be difficult to obtain without travelling to a major city.
The company raised more than US$120 million in capital, with its most recent raise being a US$50 million Series C, and expanded into new markets, but has now appointed Makenzi Muthusi and Julius Ngonga of KPMG to manage its administration process.
“Copia Global, the parent company of Copia Kenya, was unable to attract capital on terms that were amenable to all existing stakeholders, funders, and investors. Copia Global is now winding down, leaving the Copia Kenya business in a new position to raise capital directly,” Copia said in a statement.
“Under the mandate of the Administrator, the Copia Kenya management team will implement a plan with a lower burn rate, an accelerated path to profitability and a focus on the increasingly digital consumer.”
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.
Disrupt Africa reported earlier this month Kenyan agri-tech venture iProcure had followed the same path. Copia and iProcure are the latest African tech ventures to feel the heat in the current global capital shortage. A host of startups have already closed their doors, including Kenyan logistics company Sendy, 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”.
