Sendy Group, a technology-driven logistics company, has found itself under administration due to its debt default, becoming the latest startup to face such a fate. In a move ordered by the High Court, Peter Kahi from PKF Consulting has been appointed to manage the company. The initial aim is to revive the business, but if these efforts prove unsuccessful, liquidation of its assets may become the next step.
The decision to place Sendy under administration follows an earlier announcement from the company that it was actively seeking new investors to acquire the business. Regrettably, these potential transactions fell through.
While the extent of Sendy’s indebtedness remains unclear, Mr. Kahi will be overseeing the various entities associated with the startup, including Sendy Kenya Freight Ltd, Sendy Ltd, Sendy Store Ltd, and Sendy Kenya Marketplace Ltd.
Last year, Sendy was compelled to shut down its retail and supplier trading platform, Sendy Supply, leading to a 20% reduction in its workforce. The reason cited was financial difficulties.
Mr. Kahi stated, “Any party with a claim against Sendy should provide their claim in writing along with relevant supporting documents and a proof of debt form to the administrator by October 19, 2023, for review.”
Sendy, which had previously secured $29 million (Sh4.2 billion) in funding, had been expanding its operations since 2015, growing its employee count from its four founders, Mesh Alloys, Evanson Biwott, Don Okoth, and American Malaika Judd, to a workforce of 300.
Starting in 2021, the company had embarked on a quest to secure $100 million (Sh14.8 billion) for expansion into western and southern Africa, including countries such as Nigeria, Ghana, South Africa, and Egypt.
Sendy’s predicament is a reflection of the challenges facing many startups in a climate where funding has become scarce, and the costs of servicing dollar-denominated debt have surged due to a weaker local currency.
The tech startup industry has also grappled with saturation in the market and a proliferation of service providers, as they attempt to address disruptions created by the COVID-19 pandemic.
Sendy’s difficulties are part of a broader trend where several tech startups have ceased their operations, primarily due to challenging market conditions and funding constraints. A Business Daily analysis reveals that at least seven prominent Kenyan-based tech startups have shuttered their operations in less than a year.
The most recent of these closures occurred in March of this year, with the e-commerce platform Zumi attributing its shutdown to the drying up of funding. Other startups that had previously closed their doors include Kune Foods, Notify Logistics, WeFarm, BRCK, and Sky-Garden.