Nigerian food procurement startup supported by Y portfolio Sale TechCrunch learned that it has changed its employee compensation structure and is seeking new capital.
After letting go 44% of the labor force – About 120 employees – Referee month, mark The second round of layoffs within five months. According to internal documents from TechCrunch, the startup now supplements the performance-based compensation system through a performance-based compensation system (ESOP), replacing the traditional salary of employees with a performance-based compensation system.
The five-year-old startup raised Series A financing of US$30 million Led by Parttech Africa and TLCOM Capital, restructuring is necessary for profitability.
The document says Vendease’s new compensation model includes a five-stage salary recovery plan.
In February, all employees received a salary of 140,000 (~$90) regardless of previous salary. From March to May, if those targets are not specified, the company will meet performance targets, raising its wages to 30% of the previous ones, the document said.
From June to August, compensation will increase to 60% of previous salary, from September to November, compensation will increase to 90%, and the expected salary recovery in December is expected to depend on company and employee performance goals again.
The unpaid portion of the salary will be converted into stock options under ESOP, with 50% of which belongs to the remaining three years. However, under employee agreements, employees can only exercise these options at fair market value approved by the board.
The company confirmed changes to employee compensation, insisting it is now at a break, even close to profitability.
A company spokesperson told TechCrunch: “Vendease has restructured its business and operations.
It said the changes are designed to encourage productivity for employees, while companies are increasingly financially sustainable. “We only spend our revenue, which allows us to branch consistently and focus on profitability,” the spokesperson added.
Vendease has more than 150 remaining employees, betting on internal restructuring, fresh capital and AI-driven efficiency to reduce costs and maintain operations. As the company notes, this also means focusing more on software-driven growth and doubling its sales and payment solutions and credit markets while phased out warehousing and logistics operations.
Bet on BNPL to stay floating
Founded in 2019 by Tunde Kara, Olumide Fayankin, Gatumi Aliyu and Wale Oyepeju, Vendease aims to simplify food procurement for African restaurants and food businesses.
The startup claims it can eliminate inefficiencies in the food supply chain, which costs billions of dollars a year. By 2022, Move 400,000 tons of food to more than 2,000 customersIt said that in its main market (Nigeria) they saved $2 million in procurement costs and reduced the losses related to waste by nearly $500,000.
But the last two years have been cruel to short selling and many Nigerian startups that don’t have FX count revenue. Since the Series A Series A in September 2022, its revenue in Nigerian Naira has tripled, but the currency’s sharp depreciation over the past three years eliminates these gains in US dollars. Inflation further increases operating costs and squeezes the profitability of capital and people-intensive businesses.
One of Vendease’s major revenue drivers over the past year is the Buy Now, Pay Later (BNPL) product. Traditional lenders avoid food companies due to fluctuations and dispersions in food companies. However, Vendease uses its supply chain knowledge to underwrite loans through its marketplace that connects financial institutions to food businesses.
The company has claimed that the default rate is less than 1% over the past two years, and Issuing more than $70 million in credit As of September 2024.
When CFO Mohamed Chaudry joined in January 2024, he helped identify BNPL as a key avenue for profitability. But despite some recent tweaks, credit products alone don’t seem to be enough to sell there.
His appointment also sparked an ongoing restructuring to strengthen financial controls and expand its cash runway, which, according to sources, could only last for a few months.
As a result, the company is in conversation with existing and new investors to raise bridges that will be used to fund technology growth and expansion rather than operating expenses.
Meanwhile, the source also said Vendease explores potential sales from Horeca (hotels, restaurants and catering) and other players in the FMCG division.
However, the company objected to this and insisted that it was the opposite way. A spokesperson said: “It’s normal that when you run a fast-growing business in a unique space like food, you’re already close to vendor.
