The unpaid balance of undisclosed debts has led to the administration of iProcure, a Kenyan agri-tech startup.
Since its 2013 founding, iProcure has created its own distribution network, utilizing a proprietary distribution technology system to link major suppliers of agricultural inputs directly with nearby agro-dealers.
iProcure guarantees the availability, quality, and delivery of essential agricultural inputs like fertilizers and seeds at up to a 25% discount from current market prices by eliminating the multiple levels of middlemen found in the traditional agricultural supply chain and offering technology-driven insights on supply levels and price.
A total of US $17.2 million in debt and equity funding has been raised by the startup, including a US $10.2 million Series B round in 2022 led by Investisseurs & Partenaires (I&P) and including participation from Ceniarth, British International Investment (BII), and Novastar Ventures.
With support from Safaricom’s Spark Venture Fund as well, iProcure entered Tanzania last year. However, it has since fallen victim to the world economic downturn and the ensuing “funding winter,” and has been placed under administration.
The global consulting firm KPMG has appointed its advisory arm as administrator. Makenzi Muthusi, who works for the company, has taken over iProcure’s offices, assets, and operations. She is also handling all claims from creditors.
“Following the appointment, all the affairs and business and properties of the company are being managed by the Administrator. The directors of the company no longer have any power or authority to deal with these matters,” KPMG said in a notice.
“Any party having a claim against the company should submit their claim in writing, with relevant supporting documentation to the Administrator on or before May 14 2024 for consideration.”
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.
If there is no realistic chance of saving the business, 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.
The newest African digital company to feel the effects of the present global funding crunch is iProcure. Many startups are still under pressure, even though a large number of them have already closed. 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.
SHARE
