Vendease, a Y Combinator-backed meals procurement startup in Nigeria, has applied its second spherical of layoffs in 5 months as a part of a restructuring effort to realize profitability and prolong its monetary runway. An organization spokesperson confirmed the layoffs to TechCabal, saying the transfer aligns with the startup’s shift towards a extra capital-efficient mannequin whereas it seeks to shut a Collection A extension spherical.
The most recent layoffs, which start as we speak, will have an effect on about 120 staff (44% of employees). This follows a earlier spherical in September 2024, which impacted 68 staff (20% of employees).
“Restructuring takes time and occurs in phases,” Mohamed Chaudry, Vendease’s Chief Monetary Officer, instructed TechCabal. He mentioned the corporate is shifting towards a “lean group” to enhance operational effectivity.
Regardless of elevating $33 million since its founding in 2019, Vendease has struggled with macroeconomic headwinds, together with naira devaluation and rising inflation, which have considerably elevated operational prices. The corporate didn’t disclose how a lot of the $33 million stays or the way it has been allotted.
Whereas the corporate claims income has grown 600% year-on-year over the previous two years, revenues have possible remained flat in greenback phrases, probably hindering enlargement.
Past employees reductions, Vendease is making key strategic shifts to enhance monetary sustainability. A serious change entails repurposing its buy-now-pay-later (BNPL) providing from a loss chief to a revenue-generating product. Beforehand, the corporate absorbed curiosity prices for long-term mortgage funds, permitting prospects to finance meals purchases at a flat price. Now, it has switched to a day by day curiosity mannequin, enabling Vendease to revenue from lending whereas prospects pay pro-rata curiosity.
“Distributors had been keen to attend 4 days for items from Vendease, even with instant-purchase choices from different suppliers, due to the entry to credit score,” Chaudry defined. The brand new mannequin goals to monetize this demand whereas bettering money move.
Along with restructuring, Vendease has launched in-house AI expertise to automate beforehand handbook processes, similar to demand forecasting and useful resource planning. The corporate claims this shift is bettering capital effectivity, although it has not disclosed particular price financial savings or efficiency metrics.
Vendease’s buyers—together with Partech, TLcom Capital, VentureSouq, Hustle Fund, and Hack VC—are supportive of the corporate’s pivot, in accordance with Chaudry. He added that a number of buyers have dedicated to taking part within the ongoing Collection A extension spherical, although Vendease declined to reveal the goal elevate.
Whereas Chaudry said that the prolonged runway and incoming funding will assist Vendease obtain the milestones obligatory for a Collection B spherical, he didn’t specify what these milestones are. Given the corporate’s challenges, profitability and sustained progress in greenback phrases will possible be key hurdles.
Vendease’s restructuring underscores a broader development amongst Nigerian startups adjusting to financial realities—focusing much less on speedy enlargement and extra on profitability, effectivity, and sustainable enterprise fashions.
Ngozi Chukwu stories on e-commerce for TechCabal. She may be reached at ngozi@bigcabal.com or on X, @NgoziChukwu_.
Editor’s observe: This text has been up to date to make clear that Vendease operates in every single place in Nigeria, not solely in six states. It additionally corrects the variety of staff laid off 5 months in the past to 68. Moreover, the newest layoffs influence 44% of the corporate’s employees, not the beforehand reported determine of about 30%.
