Timely Funding Boost Breathes New Life Into Twiga’s Turnaround Plan
Kenyan agritech startup, Twiga Foods, has announced a significant capital infusion from existing investors including Creadev and Juven. The undisclosed funding comes at a crucial juncture for the company, coinciding with an ongoing restructuring phase that witnessed a reduction of nearly 40 percent in its workforce.
CEO and Co-Founder, Peter Njonjo, while refraining from disclosing the exact funding amount, articulated that this investment marks the culmination of a strategic transformation at Twiga. He highlighted the company’s sharpened focus on cost efficiency and an improved approach to serving its customer base.
Njonjo expressed gratitude to both current and former employees, acknowledging their contributions to Twiga’s success amidst organizational changes. Notably, the recent restructuring, which included significant layoffs, was initiated due to challenging market conditions and a scarcity of short-term funding opportunities impacting the company’s expansion plans across Africa, as Njonjo shared in a Medium post published earlier this month that was later withdrawn for unknown reasons.
The capital constraints faced by Twiga were attributed to global financial shifts, particularly the surge in US interest rates affecting available investment capital in emerging markets like Africa. Consequently, Twiga had to streamline its operations, reducing costs to sustain its business without escalating prices, ensuring continued affordability for its customers.
‘’So, in the short term, we can sustain the business with a 40 percent reduction in operating costs instead of increasing prices to ensure customers still get affordable goods and services despite the economic environment. This restructuring plan has the full backing of the current shareholders,’’ Njonjo is quoted as saying in the local publication techTrends.
However, despite these challenges, Twiga remains committed to its mission of digitising the informal retail economy and revolutionizing food supply chains across Africa. Hein Pretorius, Twiga’s Chairman, expressed appreciation for the support received from investors, employees, suppliers, customers, and other stakeholders during this transformative phase.
This development arrives on the heels of prior reports detailing Twiga’s efforts to resolve financial woes and clear outstanding dues owed to suppliers. The company had faced mounting pressure due to delayed payments to over 100 suppliers, prompting concerns about severing ties with the startup.
While Twiga’s recent funding injection provides a glimmer of hope, the company’s journey forward involves navigating financial headwinds and sustaining operations in a challenging economic environment. Despite the hurdles, Twiga remains resolute in its commitment to leveraging technology to reshape Africa’s agricultural landscape.
The funding boost signifies a potential turning point for Twiga Foods, underscoring its determination to weather the storm and continue its quest to transform food supply chains in the region.
