Kenyan based E-Commerce Firm Copia Goes into Administration

Introduction

Copia Global, a leading last-mile delivery and e-commerce platform based in Kenya, has entered administration. The company has appointed Makenzi Muthusi and Julius Ngonga of KPMG to oversee the administration process.

Capital Challenges Lead to Administration

Copia Global, the parent company of Copia Kenya, issued a statement indicating its failure to secure capital on terms agreeable to all stakeholders, funders, and investors. This financial hurdle has led to the winding down of Copia Global, allowing Copia Kenya to seek capital independently.

Official Statement

The company's statement read: “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 appointed Administrator will collaborate with Copia Kenya's management to attract new investors and implement a revised business strategy. This plan aims for a lower burn rate, an accelerated path to profitability, and a stronger focus on the digital consumer.

Management's Plan

Under the Administrator's mandate, the Copia Kenya management team will work towards creating a leaner, more digitally-focused operation. This strategy includes necessary retrenchments to align with the new business model and future growth prospects.

The administration process is likely to result in significant job losses. While preserving jobs is a key objective, the company acknowledges that staff reductions are inevitable to align with the new digital strategy and ensure future growth.

The company stated: “While preserving jobs is a key goal through administration, unfortunately, a retrenchment of staff will likely be necessary in the near future to right-size and right-shape Copia to the new digital opportunity and create a position for growth.”

Funding and Economic Challenges

Copia has raised approximately $123 million across eight funding rounds. However, the challenging capital market environment over the past two years has severely impacted the availability of funds, particularly in Africa and the e-commerce sector.

In response to these financial difficulties, Copia laid off 25% of its permanent workforce in July last year, amounting to around 350 employees. This followed an earlier reduction of 50 employees in April of the same year, coupled with the suspension of its African expansion plans, including operations in Uganda.