Why tech startups die in Kenya Copia, twiga, sendy

@k.kiumbe

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SoundTikTok sound · original sound - fabriziromanonews

Why it worked

The video likely resonated with viewers due to its direct discussion of high-profile startup failures in a specific region, offering relatable insights into market challenges and economic factors that impact business success.

Summary

The video discusses the challenges faced by tech startups in Kenya, highlighting three major companies (Copia, Twiga Foods, and Sendy) that have struggled or failed despite significant funding. The speaker attributes these difficulties to the fragmented and complex nature of the Kenyan market, contrasting it with the more successful and unified markets in Europe and North America.

Structure

1Introduction of the topic: why Kenyan tech startups fail.
2Mention of three specific companies: Copia, Twiga Foods, and Sendy, and their funding/struggles.
3Discussion of Sendy's operational model and its eventual failure.
4Comparison of Kenyan market challenges with European and North American markets.
5Explanation of market fragmentation and high-income population as key factors for success.
6Conclusion on the difficulty of selling products in Kenya due to these factors.

Product placement

Copia Global (raised Sh15.9B, filed bankruptcy in 2024) acts as an e-commerce platform that delivers goods. Twiga Foods (raised Sh20.3B, backed by Goldman Sachs) acts as a food supply chain platform. Sendy (raised Sh3.4B) acts as a logistics platform.

Original caption

Three Kenyan startups raised Sh38.6 billion+ combined. All three still collapsed or nearly did. 🔹 Copia Global — Sh15.9B raised. Filed bankruptcy in 2024, left with Sh2.6M in the bank. 🔹 Twiga Foods — Sh20.3B raised. Backed by Goldman Sachs. Survived, but gutted staff and operations. 🔹 Sendy — Sh3.4B raised. Burned Sh129M/month. Ran out of cash, shut down in 2023. Money isn’t the problem in Kenyan tech. What happens after the funding lands is. #KenyaTech #StartupKE #fyp #kenyanstartup

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Transcript

I recently did a video about how is difficult to sell solutions especially in Kenya. And someone is saying, oh, you do not offer solutions, you only sell softwares or be creative or offer premiums. And I was reflecting on three giants that actually closed shop. Number one is Twiga, Twiga Foods. Twiga Foods raised 27 billion shillings and it was an amazing ecosystem. They would, they would get fresh produce from farmers as far as Meru and beyond. And they also got to F&MCG. They even had ads on Citizen TV and they ran for quite quite some time. And then they closed. The other company is actually Copia. Copia raised close to 16 billion shillings. Copia was delivering goods to Machanani. They even had ads on Citizen TV and they ran for quite quite some time. And then they closed. The other company is Sendy. Sendy I used to use Sendy in 2016 and 2017 to send packages in Nairobi. It had a very, very nice concept. For example, in Karen or in Langata, you want to send a package in Kikuyu Road or along maybe Kiambu Road or Jogoo Road, Sendy actually did it. Sendy was actually filling that gap and they failed. So, tech ecosystem in Kenya is just complex. You are hearing news like, you know, Jumia has never made profit since they launched in Kenya. They have closed a few countries, I don't know whether they closed in Tanzania. But it's just been difficult to run tech ecosystem in Kenya. I don't know whether it's the economy, whether it's governance, whether it's just the approach. But I don't know whether any tech company that has actually excelled in Kenya, especially without a funding. Those with funding have failed, without funding obviously it's difficult. So, the reason why I think, you know, European market is succeeding, the American market is succeeding, is also about the issue of having a huge population that, you know, is high income. If you launch a product in America, you are looking at 300 million people over $100 dollars a day income, same with Canada, same with Europe. Our market is very fragmented. It's hard to launch in Kenya and selling in Tanzania, hard to launch in Kenya and selling in Uganda, hard to launch in Ethiopia and selling in Kenya. So, our population is very fragmented. Our solutions and our problems are also very fragmented. So, I think that is the reason why, you know, tech, um, it's just difficult to sell a product in Kenya. And I don't know any tech company that has actually, um, excelled in Kenya, especially without a funding. Those with funding have failed, without funding obviously it's difficult. So, the reason why I think, you know, European market is succeeding, the American market is succeeding, is also about the issue of having a huge population that, you know, is high income. If you launch a product in America, you are looking at 300 million people over $100 dollars a day income, same with Canada, same with Europe. Our market is very fragmented. It's hard to launch in Kenya and selling in Tanzania, hard to launch in Kenya and selling in Uganda, hard to launch in Ethiopia and selling in Kenya. So, our population is very fragmented. Our solutions and our problems are also very fragmented. So, I think that is the reason why, you know, tech, um, it's just difficult to sell a product in Kenya.