After failing to secure funding, the parent company of Copia Kenya enters administration
Copia Global, the parent company of Copia Kenya and a B2C e-commerce company, has gone into administration due to a lack of funding to sustain operations.
Copia, which was founded in 2013, offers a wide range of products and dependable, efficient delivery to customers at the “base of the pyramid” by utilizing technology and a network of local agents. Thanks to its service, households in rural areas can now easily obtain goods that would otherwise require traveling to a larger city.
The company has raised over US$120 million in funding, the most recent of which was a US $50 million Series C. It has also entered new markets, but it has now assigned KPMG’s Makenzi Muthusi and Julius Ngonga to oversee its administrative process.
“Copia Global, the parent company of Copia Kenya, was unable to attract capital on terms that were amenable to all existing stakeholders, funders, and investors. Copia Global is now winding down, leaving the Copia Kenya business in a new position to raise capital directly,” Copia said in a statement.
“Under the mandate of the Administrator, the Copia Kenya management team will implement a plan with a lower burn rate, an accelerated path to profitability and a focus on the increasingly digital consumer.”
When a company faces financial difficulties, going into administration legally gives it “breathing space” by shielding it from creditor enforcement actions while any necessary financial restructuring takes place, if at all possible, to save the business as a going concern.
Suppose there is no realistic chance of saving the business. In that case, the administrator will try to get a higher return for creditors than if the business were wound up without going through administration. This could take the form of a sale to an unaffiliated party. Liquidation will be considered as a last option if an administrator is unable to sell the company or bring it back to life in order to guarantee creditors receive at least some of their money back.
Amidst the current global capital shortage, Copia and iProcure are the latest African tech startups feeling the heat. Many startups are still under pressure, even though a number of them have already closed, including the Kenyan logistics company Sendy. For instance, due to its inability to grow to the required extent in light of the global “funding winter,” Kenyan retail-tech startup MarketForce was recently forced to shut down its B2B e-commerce platform RejaReja.
