A food procurement startup, backed by Partech and YC, operating in six Nigerian cities, has made the decision to carry out a second round of staff layoffs within five months, as part of a restructuring effort to enhance profitability and extend the company’s runway for a Series A extension round.
The initial round of layoffs in September 2024 impacted 86 employees, approximately 20% of the workforce, while the recent second round will see around 120 employees, about 35% of staff, being let go.
The company’s CFO mentioned that the current layoffs are part of a staged streamlining process to create a more efficient team structure.
Facing challenges from economic factors such as Naira devaluation and rising inflation, the company, despite significant revenue growth, is reassessing its business model to address these issues.
Changes include transforming its buy-now-pay-later (BNPL) product into a revenue-generating service by implementing daily interest charges. Additionally, the company has introduced AI technology to automate tasks and enhance capital efficiency.
Investors are supporting the company’s pivot, with commitments for the ongoing Series A extension round, aimed at achieving milestones for a future Series B round, leveraging the extended runway and new funding.