Copia halts operations in six towns as funding troubles persist

KENYA- E-commerce firm Copia has announced halting of delivery services in six towns two weeks after going into administration as part of its restructuring efforts amid funding challenges. 

Through an internal memo to staff, Copia revealed it had halted processing deliveries in Eldoret, Meru, Embu, Machakos, Kericho, and Naivasha. Staff in the affected towns will go on a furlough as they await further directions. 

Ann Mwihaki Copia’s Director of Human Resources emailed staff, “We regret that we have to stop serving these locations at this time as we resize and reshape the business, but we expect that we will return to these areas in the future.” 

The announcement comes less than two months after Copia exited the Ugandan market and a few weeks before the company warned it could lay off 1,060 employees as it struggles with negative economic downturn and inability to raise capital. 

The e-commerce firm suspended its Africa expansion plan last year after raising US$50 million from investors. However, the company has struggled to progress towards profitability, making many potential investors wary of investing in the firm. 

The company was placed in administration in late May following these challenges. 

“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,” the company said in a statement.  

Copia’s board appointed Julius Ngonga and Mackenzi Muthusi from KPMG to lead the administration process, tasked with restructuring the company, making it more attractive to investors. 

The board expects those tasked to lead the administration process to implement a restructuring plan with lower expenses and an accelerated path back to profitability. Ceasing of operations in the six Kenyan towns is part of the company’s restructuring efforts. 

Copia’s troubles reflect the challenges many e-commerce platforms and startups face in Africa. Competitors Kune Foods and Twiga Foods also laid off a substantial part of their workforce amid similar capitalization challenges and losses caused by the economic downturn. 

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