Copia, an East African e- commerce startup, announced on Wednesday, that it is packing up operations in Uganda and laying off 350 employees to focus on Kenyan operations, its main East African Market.
Copia is an Africa focused e-commerce platform designed to meet specific needs of Africa’s growing middle-to-low income consumers. It is neither first nor alone in the cost-cutting route as the current financial crisis, highlighted by the collapse of the Silicon Valley Bank, is forcing companies and startups to scale back their operations.
Fintech companies Wave, Chipper Cash and Kuda as well as other startups like Sendy and Twiga have all embarked on cost-cutting measures.
Bloomberg commented that Copia became the latest startup to rollback expansion plans amid concerns of a funding slowdown.
In 2022, Copia bagged a $50million funding in a C series round led by Goodwell Investments and had planned to raise up to $100 million more to expand into west Africa.
Copia’s CEO, Tim Steele said, “This is the right move for the company, given the present market environment,” adding, “By focusing our resources on our Kentans business, we can assure short-term profitability and long term success.. this means pausing our international expansion plans including suspending our Ugandan operations.”
With venture capital dwindling, African startups are faced with the hard decision of choosing whether to focus on profitability or to keep expanding.
Tim Steele is however not giving up on initial plans for Copia. “We will work hard to reach the point when we can restart our Pan African plan,” he said.
Copia uses both technology and its network of about 40,000 local agents to reach consumers in cities and towns across East Africa and has processed over 13 million orders from over 2 million customers.
The e-commerce platform was founded in 2012, commenced operations in 2023 and expanded to Uganda in 2021.
Copia said it has informed its Ugandan agents and customers of its departure and is paying up outstanding commissions to agents and providing severance packages for the affected employees.
