Copia Kenya, an ecommerce/fintech platform for mass market consumers in Kenya, is restructuring its business. The company has hired Makenzi Muthusi and Julius Ngonga of KPMG to lead an administration process whose main objective is to maintain the company as a going concern.
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 administrator will work with management to raise capital from new investors for the Kenya business.
The capital markets environment has been challenging, in the last two years, Coipia says, with a significant reduction in capital flowing into Africa generally and the ecommerce space specifically.
According to Partech, from 2022 to 2023, African venture capital decreased by 46%, participating investors decreased by 50%, and funding in the e-commerce sector specifically decreased by 53%. Meanwhile, debt is an increasing alternative source of capital for African tech startups, at more than a third of all capital raised last year.
Under the mandate of the Administrator, the Copia Kenya management team will implement a plan with a lower burn rate, an accelerated path to profitability, and a focus on the increasingly digital consumer. While preserving jobs is a key goal through administration, 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, the company added.
While Copia Kenya has been a tech company from day one, it can now transition all aspects of its operations to digital, from the customer interface to agent communications to fulfillment. In the last two years, mobile internet has become more affordable, as illustrated by a recent company survey showing that 65% of Copia customers now have smartphones and can access the Copia consumer app.
