Sendy, a Kenyan logistic firm, has announced that it has shut down its retail product Sendy Supply, consequently laying off 20% of its staff, according to a report made by TechCrunch.
Sendy Supply allowed general retailers to make orders from a variety of suppliers at good discounts. However, the product has been shut down in the meantime to allow the company to focus on another of its emerging products, Sendy Fulfillment. This, in turn, resulted in the laying off of 54 of the company’s 270-personnel workforce.
Founded in 2015 by Meshack Alloys, Evanson Biwott, Don Okoth and Malaika Judd, Sendy has been helping over 10,000 ecommerce brands send and receive goods across Africa. However, the company has experienced a difficult patch lately due to the recent funding crisis experienced by Kenyan startups.
Meshack Alloys, CEO and Co-founder of Sendy, stated that the company was far off from the projections it made the previous quarter and that there is a need for changes to be made as they target to hit the next one.
“If we look at metrics, we’re headed in the right direction, especially our contribution margins, gross profits, take rates and EBIDTA,” he stated.
“However, the gap between where we are today and where we’re supposed to be is still huge. To put that into context, if you look at the last three months from a GMV perspective, we’re only 65% of where we need to be. And from a revenue perspective, about 44%. So the gap is quite huge. And we need to do something about it, given the tough economic conditions we’re seeing.”
Alloys further explained that the major reason for this move stat is “part of Sendy’s wider strategic focus to consolidate efforts around solutions that impact more customers and speak to the current and immediate market challenges.”
Total focus will now be put on Sendy Fulfillment, the company’s product that provides ecommerce brands services that include storage, packing, delivery and distribution of goods.
According to Alloys, the fulfillment service is a core product with a bigger addressable market and, unlike its Supply product, wasn’t affected by price fluctuations.
“With the growing uptake of digital commerce and recognizing the opportunities it presents for businesses, we are doubling down on fulfillment to support online merchants with the necessary tools to sell and fulfill directly through digital platforms,” Alloy said.
“We understand the potential of digital commerce. Therefore, Sendy will now sharpen its focus and invest resources in building fulfillment and transport services for businesses.”
The laying off of 20% of Sendy’s workforce is the second of its kind made by the company in the last three months. The company had 300 staff in its workforce but laid off 10% of that number back in July, a move it claimed was made to cut costs as a result of the recent issues that have affected tech companies globally.