Inside SweepSouth’s choice to shut its Nigerian and Kenyan companies

Inside SweepSouth’s choice to shut its Nigerian and Kenyan companies

In June 2022, South Africa-based on-demand residence cleansing startup, SweepSouth, expanded to Nigeria after months of scoping out the market. 5 months later, it instructed prospects that it was shutting down operations. It additionally closed store in Kenya, one other promote it expanded to in 2019. Former SweepSouth workers who spoke to TechCabal mentioned the corporate’s choice to finish operations in Nigeria and Kenya took them abruptly. One supply instructed us that the corporate solely instructed them in regards to the choice a number of hours earlier than they had been disconnected from firm techniques. 

SweepSouth launched in South Africa in June 2014 as an “Uber for cleansing providers”, and raised an undisclosed seed round in 2015. With a presence throughout three South African cities, SweepSouth’s proposition was to assist metropolis dwellers discover skilled cleaners at low costs. The startup charged as little as $3/hour at launch, and in 2016, it raised $600,000 from traders to develop throughout South Africa. Whereas it didn’t announce an extra funding spherical till late 2022, it’s seemingly that the corporate raised cash earlier, because it coincided with the start of a regional enlargement. It launched in Egypt, Nigeria, and Kenya inside a three-year window. 

SweepSouth blamed its Nigerian closure on trading pressures
SweepSouth blamed its Nigerian closure on buying and selling pressures

Half-hearted enlargement fuels uncertainty

In 2019, SweepSouth started increasing throughout Africa. First, it acquired FilKhedma, a house providers market, in its best-thought-out enlargement transfer. In Nigeria and Kenya, it opted to construct from scratch. 

One supply who spoke to TechCabal anonymously for concern of reprisals mentioned that SweepSouth’s enlargement to Nigeria and Kenya was half-hearted. Our supply instructed us that operational setups within the new international locations had been usually shoddy. “In these international locations, there have been fixed funds and headcount cuts which meant uncertainty and fixed firefighting. There was additionally a tradition of paperwork that meant that staple items for operational setup had been by no means executed.”

A vital a part of increasing its service was web site redesigns for a global market and conserving the peculiarities of every nation in thoughts. Sources mentioned that the corporate moved slowly to get the appropriate know-how, resulting in delays in launching apps for the brand new markets and unstable web sites. Ultimately, these delays and issues would result in closing these new markets. 

When requested in regards to the choice to shut its enterprise in Nigeria and Kenya, the corporate mentioned in an electronic mail, “We’re at all times evaluating operations in every of the markets we’re in and their contribution to the general enterprise. We made the tough strategic choice to take an operational pause in wanting on the short- and medium-term unit economics in Nigeria and Kenya. There have been additionally market-specific elements regarding forex devaluation in Nigeria and slowed financial development expectations that we thought-about when making these tough selections.”

Workers caught off-guard by the closures 

When SweepSouth introduced that it secured $11 million in funding in September, many thought the startup would double down on its enlargement. As an alternative, what adopted, in accordance with former workers who spoke off the file, was much less enthusiasm from the corporate’s leaders. SweepSouth’s high administration routinely missed all-hands conferences for his or her the brand new operations. There have been additionally adjustments in enterprise projections that weren’t communicated. 

One supply instructed TechCabal “They instructed our group in regards to the closure on a Friday, and fewer than two hours after the e-mail, we had been faraway from all techniques. We had been on the receiving finish of insults from prospects, and had been known as names; our cleaners had been confused by the suddenness of the closure too. Refunds additionally needed to be given to individuals who had paid prematurely, and that took some time. Lots of these refunds weren’t executed till December.” 

In an electronic mail to TechCabal, SweepSouth didn’t deny that workers had been locked out of firm techniques hours after they had been instructed in regards to the choice to finish operations. The corporate mentioned within the electronic mail that “reserving entry to firm information is customary safety observe internationally throughout such a interval, and a prudent selection given our duty to guard buyer data”.

On the declare that it didn’t make refunds to some prospects till weeks after closure, SweepSouth’s electronic mail to TechCabal didn’t say how lengthy it took to make the refunds. As an alternative, their electronic mail mentioned they “made the announcement with sufficient discover to proceed bookings for a number of weeks after that. As soon as we reached the date in query, reconciliations had been executed for patrons who had excellent balances on the system, they usually had been refunded.”

SweepSouth CFO leaves the corporate amid layoffs 

There have been rumors that the corporate’s Chief Monetary Officer (CFO) has left the corporate, and different unconfirmed stories of layoffs inside the enterprise, with one supply claiming that at the least 30% of workers throughout Egypt and South Africa had been fired. 

TechCabal can now verify these stories. In response to SweepSouth, along with shedding its Kenya and Nigeria groups,  layoffs “affecting different group members.” Our CFO just lately left the corporate as a consequence of long-discussed plans to relocate to Europe.” The corporate didn’t touch upon the variety of workers laid off. 

In the end, it appears like a well-known story of workers left to carry the bag whereas a startup rolls out the now-familiar excuse of the financial system and broader macroeconomic situations. Whereas SweepSouth says it supported group members and carried them alongside within the choice to shut operations, former workers insist that that’s an incorrect model of occasions. 

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