Kenyan e-commerce start-up Copia closes Uganda operations
Published on: May 02, 2023 12:13 (EAT)
Kenyan e-commerce
start-up Copia Global has closed operations in Uganda.
Founded in
2013 by former Silicon Valley maestros Tracey
Turner and Jonathan Lewis, the
business-to-consumer (B2C) company provides
a platform for rural, middle to low-income consumers to order products that are
delivered at their convenience.
Copia scaled
operations to Kenya’s western neighbour in 2018.
The start-up’s
CEO Tim Steel announced the suspension in a statement, citing the economic downturn and
constrained capital markets.
Steel said they will also pause
expansion across the continent double down on efforts to drive our founding
Kenya business to sustainable, scaled profitability.
”We will pause our Africa expansion
plans and suspend our recently established Uganda operation through this
period. This decision is consistent with many of the best companies in Africa
and across the world, which are responding to the market environment and
prioritizing profit,” he said.
“Our Uganda business successfully
demonstrated the demand for and replicability of the Copia model in bringing
e-commerce to the Africa mass market and we are hugely grateful to the talented
team in Uganda who made this happen in such a short time frame.”
Copia had
last year raised over Ksh.5.6 billion ($50 million) from a Series C equity
round to boost its efforts to expand across the continent.
The company
at the time said the new capital will enable it to grow its existing model in
Kenya and Uganda and in the future, Rwanda and Tanzania.
Its model comprises digitally-enabled, locally-based agents who
operate as order and delivery points to meet consumers where they are, online
or offline.
The agents
are existing trusted shopkeepers like a local grocer or butcher, where
customers can select and pay for products chosen from a Copia catalogue.
Once a
customer places an order, Copia sends an SMS order confirmation to both the
agent and the customer and in 2 days, Copia delivers the products to the agent
for customer pick up.
Steel said Copia still plans to relaunch in Uganda and across the continent once the situation is favourable.
Uphill battle for e-commerce ventures
However, e-commerce firms have especially had a hard time with uptake due to hesitancy and last-mile delivery challenges, as well as the absence of a reliable national courier service which has forced companies to invest heavily in dispatch teams.
For instance, the NYSE-listed Jumia, which is Africa’s biggest e-commerce platform, is still not profitable since its launch in 2012 despite reports of growth in the African e-commerce scene.
In December, the Amazon-style e-commerce platform Sky Garden was acquired by tech credit platform Lipa Later on the brink of closure following insolvency.
The B2C (business-to-customer) platform that helps retail stores digitise offline and online sales, said the overall market in 2022 had been a struggle.
And in March, Zumi, the Kenyan e-commerce start-up that started as a women-focused digital magazine before becoming an apparel online retailer, announced its closure.
The B2B (business-to-business) marketplace cited a funding drought.
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