Twiga Foods, a leading Kenyan e-commerce startup known for revolutionizing food distribution across Africa, has announced another round of layoffs, marking its second workforce reduction within a year. The company will let go of 59 employees as part of a broader restructuring effort aimed at accelerating its path to profitability. This move follows a previous layoff of 283 employees in August 2023, highlighting the company’s ongoing challenges.
Struggles and Strategic Shifts
Twiga Foods has faced significant hurdles throughout 2024, including a legal battle with cloud service provider Incentro over an unpaid bill of $261,000. This lawsuit shed light on the startup’s cash flow issues, as it struggled to meet its financial obligations to vendors and employees. The situation was further complicated by the departure of co-founder and CEO Peter Njonjo in March 2024, following a new funding round. His exit fueled speculation that he may have been ousted as part of the company’s restructuring strategy.
In May 2024, Charles Ballard, a former executive at Jumia, took over as CEO, signaling a new direction for Twiga. Ballard emphasized the importance of the recent changes, stating, “These adjustments will allow us to improve our service offering and lay a stronger foundation for sustainable growth in the years to come.”
Financial Backing and Future Plans
Despite its challenges, Twiga Foods managed to secure $35 million in convertible bonds from both new and existing investors, including Creadev and Juven, in November 2023. Interestingly, Peter Njonjo contributed $1 million of his personal funds to this funding round, demonstrating his continued belief in the company’s mission.
As part of its restructuring, Twiga Foods will also open 25 new roles in its growth and innovation departments, aiming to bolster its technological capabilities and enhance its market presence. These strategic hires are intended to support the company’s long-term vision of revolutionizing food distribution in Africa through innovative digital solutions.
Looking Ahead
The restructuring at Twiga Foods reflects a broader trend among African startups, where companies are increasingly focused on achieving profitability amid challenging economic conditions. For Twiga, the road ahead will involve balancing its ambitious growth plans with the need to stabilize its financial footing and rebuild trust with its stakeholders.
As Twiga Foods navigates these turbulent times, the company’s leadership remains optimistic about its future. With a stronger focus on innovation and efficiency, Twiga aims to overcome its current challenges and continue its mission to transform the food distribution landscape in Africa.