Troubled e-commerce start-up Copia suspends operations in six Kenyan towns

Troubled Kenyan e-commerce start-up Copia has stopped operations in six towns amid a cash crunch that saw it put under administration just last month.

Failure to secure additional funding has tossed one of Kenya's most-funded start-ups under financial constraints, forcing it to take radical cost-cutting measures in the past few weeks.

As a result, the business-to-consumer (B2C) company has ceased services in Naivasha, Embu, Kericho Machakos, Meru and Eldoret effective May 29, per an internal communiqué to staff.

Staff working in the depots serving these markets have been sent on leave awaiting further directions, with the company saying it still hopes to resume services in the affected areas albeit without a definite timeline.

Copia provides a platform for rural, middle to low-income consumers to order products that are delivered at their convenience by agents.

Founded in 2013 by former Silicon Valley maestros Tracey Turner and Jonathan Lewis, 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 start-up was on May 23 placed under administration, a process where an independent person takes control of a company, investigates its finances and then recommends a way forward. This could be winding up the company, selling it or restructuring.

Copia appointed Makenzi Muthusi and Julius Ngonga of multinational advisory firm KPMG to help rescue it.

Leading up to this, the venture had just a week before announced that 1,060 jobs were at risk of redundancy after it opted for drastic organizational restructuring amid efforts to get capital to sustain operations.

Copia at the time also warned of a looming shutdown if its financial challenges persist and even gave a one-month redundancy notice to staff per local labour laws.