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YC-backed Vendease Slashes Workforce by 20%

September 30, 2024

Amid business restructuring, YC-backed Vendease slashes workforce by 20% as it sets sights on sustainability.

During a conversation with Techpoint Africa, Tunde Kara, co-founder and CEO, disclosed this development, noting that the decision was the result of an extensive evaluation process spanning several months.

In January 2024, the four-year-old startup hired Mohamed Chaudry as its Chief Financial Officer. Prior to joining Vendease, Chaudry had spent time in the food tech industry, notably at Foodhub.

As Vendease’s new CFO, his mandate included spearheading a comprehensive operational audit to uncover areas for optimisation and streamline processes in addition to preparing the startup for future funding rounds. Vendease last raised $30 million in a Series A round led by Partech Africa and TLcom.

Chaudry’s reviews as well as a business model pivot identified a few areas the startup could improve on, leading to redundancies.

“A lot of redundancies have been created within the company for how we used to operate as a business, and we’ve carried that on our books for the last couple of months. To be honest, it’s not a sustainable way for us to do business and also delays our ongoing progress toward profitability,” Kara shared.

20% of the workforce will be affected

Sixty-eight employees, representing 20% of the workforce, will be affected by the decision. Affected employees will retain access to their health insurance packages and would receive at least a month’s worth of wages based on their contracts.

Vendease’s people and culture team will also assist the retrenched workers in the transition with placements and recommendations to other organisations, Kara said.

When Vendease launched, it did so as a marketplace connecting food businesses to suppliers and manufacturers.

Over the last 24 months, it has embedded credit and payments into its offerings. Although the startup has been issuing credit to its customers, it only recently intensified its efforts after identifying a need in the market.

Food businesses, like any other in Nigeria, struggle to access credit, and their low margins only contribute to their difficulties in accessing credit, a challenge Vendease believes it can tackle.

“What Vendease has built over the last four years is a credit bureau, so to speak, through a credit rating algorithm that we built ourselves that rates food businesses on both sides of the market and then, through our banking partners, can extend credit that we know will be paid back.”

Vendease has extended over $72 million since it launched, with the majority coming in the last 12 months. It has nearly tripled its customer base since raising its Series A and previously laid off over 20 employees in 2022.

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