Copia, a Kenyan-based B2C e-commerce platform that serves middle to low-income African consumers, has officially decided to liquidate its assets and pay off its creditors, marking the end of its efforts to revive its business.
This decision comes after a series of attempts to sustain operations and find a viable path forward for the company. The liquidation process will involve laying off all employees, as well as selling off the company’s assets which includes delivery trucks, warehouses, amongst other equipment, to generate the funds needed to settle outstanding debts.
This move aims to ensure that creditors are compensated as fairly as possible. However, the tough decision to liquidate was not made lightly, reflecting the company’s acknowledgment of the insurmountable obstacles it faced in its efforts to achieve profitability and sustainability.
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In an email sent to staff as reported by TechCabal, Copia administrator Makenzi Muthusi wrote,
“It was anticipated that Copia’s business will be maintained as a going concern, albeit with significantly reduced operations to attract the much-needed through a new company to enable business continuity. However, this has regrettably not been successful, and it is apparent that the company’s options are limited to the 3rd objective of administration as provided for in the Insolvency Act of 2015: realization of assets to settle creditors’ claims”.
Employees were given severance packages on July 4, which was disclosed via a memo. Also, the company notified its creditors of a meeting on July 14 for guidance on their respective claims.
Background Story
Copia was founded in 2013 with a mission to provide convenient and affordable online shopping options to underserved low and middle-income consumers in rural areas. Leveraging a unique model that combines technology with a network of local agents. The firm aimed to bridge the gap between urban e-commerce and rural consumers who traditionally lacked access to such services.
The company gained a strong foothold in Kenya where it operates, gaining a reputation as a pioneering e-commerce platform tailored to the needs of underserved populations. Despite its innovative approach, Copia faced several financial challenges. Some of these include a harsh economic environment, high cost of maintaining logistics, and limited purchasing power, amongst others.
In April 2023, the company halted its African expansion plans and also suspended its operations in Uganda. It attributed the decision to unfavorable economic conditions and constrained capital markets. Fast forward to July 2023, Copia cut off 350 of its staff, after it had earlier in the year, reduced its headcount by 50 employees in what the company described as a drive to keep down labor costs while eyeing profitability.
In December 2023, Copia secured a $20 million fund in a series C round, after announcing plans to intensify focus on Kenyan operations. Speaking on the raise if the funds, the CEO Tracey Turner said,
“We are all heads down and focused on Kenya right now, and we won’t pick up our heads, until after we hit that milestone. We have done a lot of reconnaissance work and planning for where we will go next and the international rollout plan will come after we reach profitability in Kenya”.
However, in May 2024, Copia entered administration after failing to secure extra funding. The B2C eCommerce company appointed Makenzi Muthusi and Julius Ngonga from KPMG to handle the process. Despite its efforts, the company couldn’t attract new capital on terms that worked for everyone involved.
Consequently, the company announced a switch from physical order processing to an online fulfillment model using its mobile app to reduce expenses and streamline operations in the digital age. Under the guidance of the administrators, it sought to push for a lower burn rate, with hope to reach profitability sooner, and cater to the increasingly digital consumer.
Unfortunately, Copia’s financial situation became untenable, leading the company’s leadership to make the difficult decision to liquidate its assets. The company shutdown highlights the challenges faced by startups, especially those operating in underserved markets.
While the company’s innovative approach and vision for inclusive e-commerce were commendable, the financial and operational hurdles proved too significant to overcome.