Twiga Meals, one in every of Kenya’s most funded e-commerce startups, is quickly suspending its Nairobi operations for 2 months as a part of what the corporate calls “the ultimate stage” of its ongoing enterprise overhaul.
The transfer follows months of inside restructuring, acquisitions, and layoffs to chop prices and shift to a leaner, extra data-driven distribution technique. In an announcement on Thursday, Twiga mentioned the operational break will enable it to relocate from its present distribution hub at Tatu Metropolis in Kiambu County—the place it has been negotiating a brand new lease with the owner—to a extra strategically positioned facility nearer to Nairobi.
Twiga is weighing choices in Baba Dogo, Mombasa Highway, and Syokimau, the corporate informed TechCabal.
Twiga’s pause in its Nairobi operations is the most recent indication of stress from traders and market realities forcing it to recalibrate its as soon as capital-intensive provide chain mannequin. After buying native distributors Jumra, Sojpar, and Raisons, Twiga now manages eight distribution centres throughout Central, Coast, and Western Kenya, however is avoiding additional infrastructure funding within the capital.
The shift alerts a transfer towards an asset-light strategy, centered on centralising operations and leveraging know-how to optimise stock, reduce transportation prices, and higher serve small retailers.
Regardless of elevating over $180 million in funding over a number of funding rounds, Twiga’s enterprise mannequin has did not show scalable within the Kenyan market, in keeping with three former workers who spoke with TechCabal. The previous staffers, who requested anonymity to talk freely, mentioned Twiga took too lengthy to desert its capital-heavy strategy for an asset-light technique centered on tech-enabled matchmaking between farmers, suppliers, and distributors, somewhat than proudly owning logistics or stock.
“We had been burning cash making an attempt to do every thing, farming, warehousing, and deliveries,” mentioned one of many ex-employees.
The corporate informed TechCabal on Could 16 that it’s realigning its operational construction on account of shifting market calls for. Kenya’s B2B meals distribution relies upon closely on a community of regional hubs and last-mile supply to achieve 1000’s of small retailers throughout city and rural areas.
Managing this complicated provide chain requires balancing stock, transportation prices, and well timed deliveries, challenges that Twiga promised to deal with by centralising key features and utilizing extra data-driven operations. The corporate nonetheless claims it’s dedicated to this aim, saying higher tech and knowledge will assist enhance effectivity and preserve costs down.
Twiga believed in its unique mannequin of managing meals distribution from farmers to city retailers, anticipating that full management of the provision chain would finally give it a aggressive edge. That conviction, in keeping with two different ex-employees, stored the corporate from making mandatory strategic changes till 2025.
One individual with direct data of Twiga’s operations informed TechCabal that persistent losses stem from mismanagement within the logistics and provide chain departments. These issues have strained efficiency over time, resulting in important job cuts in these areas.
“The availability chain division was mismanaged and price Twiga some huge cash,” the individual mentioned, with out disclosing how a lot Twiga was burning month-to-month at the moment.
But the repeated layoffs expose the strain between Twiga’s guarantees and its present actuality. Reducing tons of of provide chain roles undercuts its earlier imaginative and prescient of constructing a stronger, tech-powered distribution system and raises questions on how a lot of that work will now rely on third-party companions somewhat than Twiga’s groups.
“The interior reorganisation impacts a sure variety of roles, primarily inside provide chain features,” Twiga mentioned in an announcement to TechCabal.
The assertion confirms the authenticity of the leaked Undertaking Easter doc—which Twiga had not disputed—which confirmed that offer chain roles would endure probably the most.
The startup’s final main funding spherical was a $35 million convertible word in 2023, and insiders say traders have been pushing for tighter self-discipline on prices and operations. With the Nairobi pause, Twiga hopes that consolidating its infrastructure and enhancing its tech capabilities will present it the steadiness it must regain its footing and stay related in Kenya’s retail market.
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