Kenyan e-commerce firm Copia liquidates assets, ends attempts to revive business

Copia, a Kenyan B2C e-commerce platform serving middle- and low-income African consumers, has officially decided to liquidate its assets and repay creditors, ending its efforts to revive its business.

The decision comes after a series of attempts to keep the business afloat and find a viable path forward for the company. The liquidation process will involve laying off all employees, as well as selling off company assets, including delivery vehicles, warehouses and other equipment, to generate funds to settle outstanding debts.

The move is intended to ensure that creditors are compensated as fairly as possible. However, the difficult decision to liquidate was not taken lightly, reflecting the company’s recognition of the insurmountable obstacles it faced in its efforts to achieve profitability and sustainability.

In an email sent to staff, reported by TechCabal, Copia administrator Makenzi Muthusi wrote:

“It was envisaged that Copia would continue as a going concern, albeit with significantly reduced operations, in order to attract much-needed headcount through a new company to enable continuity of business. Unfortunately, this has not been achieved and it is clear that the company’s options are limited to the third purpose of administration under the Insolvency Act 2015: realisation of assets to settle creditor claims.”

The employees received their severance packages on July 4, the memo revealed. The company also notified its creditors of a meeting on July 14 to seek guidance on their claims.

The Story Behind The Scenes

Copia was founded in 2013 with a mission to provide convenient and affordable online shopping options to underserved, low- and moderate-income consumers in rural areas. Using a unique model that combines technology with a network of local agents, the company’s goal was to bridge the gap between urban e-commerce and rural consumers who traditionally have not had access to such services.

The company has established a strong presence in Kenya, where it operates, earning a reputation as a pioneering e-commerce platform tailored to the needs of underserved populations. Despite its innovative approach, Copia has faced several financial challenges. Some of these include difficult economic conditions, high logistics maintenance costs, and limited purchasing power, among others.

In April 2023, the company put its expansion plans in Africa on hold and also suspended its operations in Uganda, attributing the decision to unfavorable economic conditions and capital market constraints. Fast-forward to In July 2023, Copia laid off 350 workers, after cutting its workforce by 50 earlier this year. The company said it wanted to reduce labor costs while maintaining profitability.

In December 2023, Copia raised $20 million in a Series C funding round after announcing plans to increase focus on operations in Kenya. Speaking about the funding raise, CEO Tracey Turner said,

“We are all focused on Kenya now and we will not raise our heads until we reach that milestone. We have done a lot of reconnaissance work and planning where we will go next and the international rollout plan will come after we reach profitability in Kenya.”

However, in May 2024, Copia filed for bankruptcy after failing to secure additional funding. The B2C eCommerce company appointed Makenzi Muthusi and Julius Ngonga of KPMG to handle the process. Despite their efforts, the company was unable to raise new capital on terms that suited everyone involved.

As a result, the company announced a shift from physical order processing to an online fulfillment model, using its mobile app to reduce expenses and streamline operations in the digital age. Under the administrators, the company has sought to push for a lower attrition rate, hoping to reach profitability faster and meet the needs of an increasingly digital consumer.

Unfortunately, Copia’s financial situation became unsustainable, prompting the company’s management to make the difficult decision to liquidate its assets. The closure highlights the challenges startups face, especially those operating in underserved markets.

While the company’s innovative approach and vision for inclusive e-commerce were commendable, the financial and operational hurdles proved too great to overcome.