Afrigather Peter Njonjo, the CEO of Twiga, a Kenyan startup that connects farmers to meals distributors, introduced his choice to take a six-month sabbatical from the corporate on Thursday, sparking fears that the corporate’s traders have been pushing him out. Njonjo’s break comes simply two weeks after Twiga efficiently raised new funding to pay suppliers it owed. TechCabal beforehand reported that one of many owed suppliers, Incentro, a cloud service vendor, had requested a courtroom to start liquidation proceedings to power Twiga to pay its money owed. Non-public conversations are nonetheless ongoing between each corporations to resolve the dispute.
Money-strapped, Twiga raised $35 million in convertible bonds—debt that pays curiosity however may also be transformed into fairness—from Creadev and Juven, two personal fairness traders who had beforehand invested in Twiga, one individual with direct data of the deal informed TechCabal. The scale and nature of the funding has not been beforehand disclosed.
Twiga didn’t reply to TechCabal’s request for feedback on the time of this report.
Creadev, one of many two personal fairness corporations that offered the most recent spherical of capital to Twiga, is a subsidiary of Mulliez Household Affiliation (AFM), the funding holding firm that controls the fortunes of a French family-owned client items conglomerate. Creadev usually invests between $500,000 to $10 million, with the potential to chop even larger cheques when it doubles down on portfolio firms. Juven, the second backer and a Goldman Sachs spinoff, follows an identical funding technique. The evergreen fund invests between $10 million and $30 million.
Creadev and Juven additionally didn’t reply to TechCababal’s request for feedback.
Heading to an exit?
In personal conversations, traders and long-time gamers in Kenya’s expertise ecosystem speculated that the timing of Njonjo’s sabbatical, one week after new funding, could recommend that he’s being graciously proven the exit by traders.
However two sources near the matter insisted that Njonjo has a “nice relationship with Creadev” and that the funding outfit remains to be “very supportive of the enterprise.” Startups making an attempt to digitise the fragmented casual marketplace for fast-moving client items and packaged meals have been arduous hit.
Twiga laid off 30% of its workers and adjusted its business mannequin, shutting down its in-house gross sales division in favour of unbiased gross sales contractors. “Our traders are absolutely supportive of this transformation,” Njonjo had informed TechCabal in August.
Regardless of Njonjo’s optimism, a outstanding seed stage investor who didn’t wish to be named so they might converse freely took a more durable view.
“I’m 90% sure Peter was fired. That is how VCs are viewing it,” the investor mentioned. “VCs in Africa are having a foul week” due to the current information and inside conversations about Twiga and different struggling B2B e-commerce startups, the investor added. Throughout Africa, rising inflation and forex devaluation have introduced economies to the brink and squeezed client spending.
Even with Twiga’s spectacular funding, the enterprise has struggled in 2023, citing an more and more difficult enterprise local weather. One former Twiga vendor questioned the month-to-month burn price of the agency, which has raised greater than $150 million in fairness and debt since 2017.
Twiga operates an asset-light mannequin, so it didn’t personal the vehicles or warehouses that housed its operations, one former vendor informed TechCabal. Greater than half of the quantity Twiga has raised (about $80 million) was raised within the final three years after the departure of co-founder and former CEO Grant Brooke, who left partly because of variations within the path traders wished to take the corporate, an individual near talks on the time informed TechCabal.
Peter Njonjo cofounded Twiga with Grant Brooke in 2014 to supply contemporary produce immediately from farmers and ship it to Kenya’s city retailers. The B2B firm is backed by traders like Genevieve Capital, Creadev, Juven AHL Enterprise Companions, and Omidyar Networks.
