Jumia aggressive cost-cutting in 2024 narrows losses to $65 million
Jumia, Africa’s largest e-commerce platform, faced another challenging year in 2024 as currency devaluations in Nigeria and Egypt—its two largest markets—eroded revenue, while shifting consumer trends and rising fulfilment costs compressed margins. Despite aggressive cost-cutting, the company remained unprofitable, reporting a $64.7 million loss for the year. Jumia’s gross merchandise value (GMV)—the total value of goods ordered on its platform—fell 4% year-over-year to $720 million in reported currency but rose 28% in constant currency, a metric that strips out the impact of devaluations. Revenue dropped 10% to $167.5 million, though it grew 17% in constant currency. The company’s marketplace revenue (from third-party sellers) declined 31%, while first-party sales fell 14%. Gross margins also contracted by 12%, reflecting weaker unit economics. Jumia’s advertising and sales expenses declined 24%, aligning with its cost-efficiency drive, but fulfilment costs rose 11% due to a surge in orders, increasing pressure on margins. Jumia expanded into smaller urban centres across its core markets, where it now generates 56% of total orders. However, this shift brought a higher volume of low-value transactions, contributing to the decline in GMV. Additionally, a drop in high-margin corporate sales in Egypt further impacted reported figures. The company exited South Africa and Tunisia, reducing its operational footprint but incurring $10 million in one-time expenses. While this costs, it also contributed to a decline in total customer numbers. Jumia’s active customer base fell to 8.3 million from 10 million in 2023, reflecting market exits and economic headwinds. However, quarterly active users rose slightly to 2.4 million from 2.3 million in December 2024, and its customer repurchase rate improved to 40%, signalling stronger retention among its remaining users. Jumia closed the year with $133.9 million in cash, providing a liquidity buffer but underscoring the need for careful cash management given sustained losses and FX volatility. A key cash drain was $13.5 million in supplier prepayments, which contributed to the company’s operating cash burn. If losses persist, Jumia may need to raise additional capital or accelerate efficiency measures to extend its cash runway. JumiaPay transactions grew 11% year-over-year, reaching $3.3 million by December 2024. Adoption increased for food and product deliveries, reinforcing Jumia’s long-term bet on embedded financial services. CEO Francis Dufay continues to push for cashless transactions, with JumiaPay positioned as a key pillar of future growth. However, it faces competition from fintech players like Flutterwave, Opay, and MTN’s MoMo, which dominate digital payments in Jumia’s key markets. As Jumia enters 2025, the company is expected to continue cost-cutting while fine-tuning its unit economics in key markets. Analysts believe profitability remains distant unless Jumia substantially increases customer spending or reduces fulfilment costs. “As we look ahead to 2025, I am optimistic about Jumia’s future,” said CEO Francis Dufay. “The business is stronger and more efficient than it was just two years ago, and I believe we have a good opportunity ahead by driving top-line growth and improving operational efficiencies.” With its market exits, shifting customer mix, and persistent losses, Jumia faces a difficult road ahead. The company’s ability to preserve cash, refine its marketplace model, and grow high-margin segments will determine if it can finally achieve sustainable profitability. With 2.6 million orders in 30 days, Jumia’s Black Friday remains a hit with customers Jumia commits to a “disciplined approach” as operating losses hit $20.1 million in Q3 2024
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The cluster effect: Why ICT startups thrive together
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner Join us for TechCabal Battlefield, Moonshot’s startup competition where you can showcase your startup idea to a global audience and an esteemed panel of judges and stand a chance to win up to 2.5 million naira in funding for your business! Click to register for TC Battlefield First published 16 Feb, 2025 Tech-driven startups are key in driving innovation and industry growth. I say tech-driven since some confuse startups with fintechs or general tech-based firms. The success of these firms creates jobs and boosts the economy, and recognising this, some countries have implemented policies to support such startups. In the 1980s, the U.K. introduced policies to cultivate an enterprise culture, which worked because its economy was strengthened. The South Korean government has been directly involved in Asian research and development investments through indirect incentives to nurture startups. Similarly, India has encouraged high-tech companies to form clusters, particularly in the ICT sector. Beyond governmental support, several factors contribute to a startup’s success. Capital is the most obvious since it provides startups with the resources and time to address challenges and pursue innovative projects. Barriers to entry also play a key role; high barriers may favour established companies but restrict new entrants. A diverse product or service range and distinctive marketing strategies can support a startup’s competitiveness. Effective communication with external entities—including other companies, government bodies, and academic institutions—is essential, with an emphasis on balanced, reciprocal interactions. However, startups often face limitations due to their size and nascent stage. Common issues include unclear or flawed business models, inadequate business development, and insufficient capital. Interestingly, these challenges can be addressed when companies developing similar products or services cluster geographically. Such proximity facilitates easier promotion to investors, access to shared knowledge and expertise, and reduced costs in sourcing skilled human capital. This is what “agglomeration” or “clustering,” means, and it offers a supportive startup ecosystem. The concept of clustering has existed since the 1990s, building upon earlier ideas of geographic concentration. Clusters are regions where interconnected companies and institutions co-locate for collaboration and competition. While this setup offers advantages like exclusive market insights and swift responsiveness to consumer preferences, it can also lead to uninformed perspectives and restricted market views. The triple helix model underscores the importance of interactions among industries, universities, and governments within clusters. Balanced collaboration among these entities is vital for regional innovation and cluster growth. For instance, Silicon Valley evolved from a university-led model to a dynamic interplay among academia, industry, and government. In practice, the dynamics within clusters vary based on their foundational objectives. Silicon Valley emerged from university-industry collaboration, while Texas’s Silicon Hills resulted from proactive government support. Similarly, Silicon Saxony in Germany was established through policies involving both federal and local governments. These examples show that different stakeholders can drive clusters—government, private sector, or academic institutions—and each configuration offers unique advantages. In Africa, the clustering approach has been important in supporting tech startups. Nairobi, sometimes called the “Silicon Savannah,” has become a hub for innovation, supported by a synergy of government initiatives, private investments, and academic collaborations. The Kenyan government’s policies, including new laws specifically designed to support startups, attempt to set up a conducive environment for startups, while institutions like iHub provide collaborative spaces for entrepreneurs. Lagos has also taken a similar approach to strengthening its tech ecosystem. The Lagos State government has proposed the Innovation Bill, which offers tax incentives and simplifies processes for startups. The law wants to address challenges in registration, incorporation, and access to patents to accelerate startup growth. The Lagos Free Zone provides a business-friendly environment with benefits like tax exemptions and profit repatriation to attract local and international tech companies. Initiatives like the Tony Elumelu Foundation are important in empowering African entrepreneurs through training, mentorship, and funding. The foundation has supported thousands of entrepreneurs across the continen. While the ideal cluster harmoniously integrates universities, private companies, and government efforts, the balance among these players varies by region and purpose. Understanding each cluster’s unique dynamics and objectives is essential for tailoring support mechanisms that actively foster startup success. Kenn Abuya Senior Reporter, TechCabal Thank you for reading this far. Feel free to email kenn[at]bigcabal.com, with your thoughts about this edition of NextWave. Or just click reply to share your thoughts and feedback. We’d love to hear from you Psst! Down here! Thanks for reading today’s Next Wave. Please share. Or subscribe if someone shared it to you here for free to get fresh perspectives on the progress of digital innovation in Africa every Sunday. As always feel free to email a reply or response to this essay. I enjoy reading those emails a lot. TC Daily newsletter is out daily (Mon – Fri) brief of all the technology and business stories you need to know. Get it in your inbox each weekday at 7 AM (WAT). Follow TechCabal on Twitter, Instagram, Facebook, and LinkedIn to stay engaged in our real-time conversations on tech and innovation in Africa. If you liked this edition of Next Wave, please share with your friends. And feel free to reply with thoughts and feedback. We welcome those. 18, Nnobi Street, Surulere, Lagos, Nigeria View in Map You received this email because you signed up on our website or made purchase from us. If you know longer wish to recieve these emails, please unsubscribe
Read MoreNigeria’s Central Bank holds interest rate at 27.50% after CPI rebasing
Nigeria’s central bank held its benchmark interest rate steady at 27.50% on Thursday, opting for stability after the rebasing of the consumer price index (CPI). The decision signals a cautious approach by Governor Olayemi Cardoso, who is balancing a need to lower inflation with the need to support an economy that is gradually winning back investor confidence. The Monetary Policy Committee (MPC) voted unanimously to hold rates and said it assessed recent macroeconomic developments, including exchange rate stability and a gradual slowdown in fuel price increases, and decided that holding rates steady was the best course of action. “The committee noted the recent rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS), which adjusted the weighting of items in the consumption basket to reflect current spending patterns,” said CBN Governor Olayemi Cardoso. The rebasing, which updates the components used to measure inflation, lowered reported inflation rates, even though underlying price pressures remain high. Nigeria’s inflation stood at 34.48% in January before rebasing, but the updated methodology adjusted it to 24.48%.The decision to hold rates was widely anticipated by analysts, who argued that further tightening could stifle business activity, while a premature cut might worsen inflationary pressures. “Inflation is at an inflection point but could pick up again in a few months. The MPC will likely wait for at least three more months to assess the rebased numbers before making a major move,” said Basil Abia, an economist at Veriv Africa. Since the start of 2024, the CBN has raised rates in an aggressive attempt to rein in inflation and stabilize the naira. This latest decision suggests the central bank is pausing to evaluate the impact of those hikes rather than committing to further tightening. Despite the reported slowdown in inflation, businesses and consumers still face rising costs, particularly for food and imported goods. With the next MPC meeting scheduled for May 2025, investors will be watching for signals on whether the CBN maintains its hawkish stance or shifts toward easing if inflation shows signs of further moderation.
Read MoreKenya’s Ebee Mobility faces higher tax bill after losing e-bike classification appeal
Kenya’s tax appeal tribunal has upheld the Kenya Revenue Authority’s (KRA) decision to classify Ebee Mobility Kenya’s consignment of e-bikes as fully built units rather than assembly parts, dealing a setback to the e-mobility startup. Ebee had argued that the bikes were imported in parts for local assembly, a classification that would have qualified for a lower 10% tax rate. However, KRA maintained that the shipments included complete e-bikes–missing only the batteries–and should attract a 25% import, 16% VAT, and excise duty at $81 (KES10,520) per part. The ruling comes amid Kenya’s efforts to promote local assembly by lowering taxes, particularly for e-mobility startups. “The tribunal finds and holds that the Respondent (KRA) was justified in reclassifying the Appellant’s (Ebee Mobility) imported products from HS Code 8714.91.00 (imported parts) to HS Code 8711.60.00 (fully built imports),” the tribunal ruled. The tribunal ruled that KRA was justified in reclassifying Ebee’s imported products from HS Code 8714.91.00 (imported parts) to HS Code 8711.60.00 (fully built imports). “The tribunal finds and holds that the Respondent (KRA) was justified in reclassifying the Appellant’s (Ebee Mobility) imported products,” the ruling stated. KRA initially demanded $53,302 (KES 6.9 million) in back taxes from Ebee in November 2023, before reducing the figure to $20,857 (KES 2.7 million) after Ebee applied for a review. KRA’s filings indicated that Ebee had declared its shipments under a preferential tariff code meant to promote local assembly. However, a post-clearance audit found that the imported units were essentially complete bicycles, lacking only batteries, which should be taxed as fully assembled products under HS Code 8711.60.00. Ebee argued that its batteries were sourced from Kenyan companies, which should qualify the imports as locally assembled products. However, the tribunal disagreed, emphasizing that the motor—not the battery—was the key component that defined an electric bike. “Even if the bicycle has a battery, and there is no motor to convert the electrical energy to kinetic energy to propel the bike, then the battery has no value in turning the bike into electrical,” the tribunal stated. This ruling could have broader consequences for Kenya’s e-mobility industry, particularly for companies that rely on importing parts for local assembly. The decision may affect two-wheeler and electric vehicle assemblers like BasiGo, Ampersand, and Spiro, as it sets a precedent that motors in imported parts can determine tariff classification. Industry stakeholders have previously expressed concerns that unclear tax policies could discourage local assembly by making imports more expensive. Kenya has positioned itself as an emerging hub for e-mobility, and tax incentives have been a key part of encouraging EV adoption. However, the tribunal’s decision raises questions about the consistency of Kenya’s tax policies in supporting the sector. It is unclear whether Ebee Mobility will appeal the ruling or push for policy revisions that offer clearer tax guidelines for partially assembled electric bikes. The decision could also prompt other e-mobility startups to reassess their import strategies or explore alternative assembly models to ensure they qualify for lower tax rates.
Read MoreExclusive: Kuda Bank raised an undisclosed equity round in 2024
Kuda Bank, a Nigerian neobank, raised an undisclosed equity round in 2024, securing additional capital after its operational costs spiked losses and led to a decline in cash reserves. In 2023, Kuda’s revenue grew to $32 million, while its user base expanded to 7.2 million. However, its losses also grew to $40 million. While the bank previously denied raising funding in 2023, its latest financial report confirmed a funding round in 2024. “The Group completed one round of fundraising via equity in 2024, and the directors are confident that should further funding be required, it can be obtained,” the company said in a corporate filing to Company House, UK. The valuation for the round remains undisclosed, but past reports suggested Kuda sought $20 million at a $500 million valuation. If it raised funding at that valuation, it would signal continued investor confidence despite the bank’s aggressive 15x revenue multiple—higher than profitable neobanks like Nubank (8.4x) and Monzo (5.4x). Kuda Bank did not immediately respond to a request for comment. Before raising the equity round, Kuda held $96 million in customer deposits, much lower than some of Nigeria’s tier-2 commercial banks like Unity Bank ($1.35 billion) and Wema Bank ($1.9 billion). It also had $5.3 million in cash reserves, a significant drop from the $30.8 million it had in 2022. Kuda plans to monetise its proprietary banking software through licensing deals, similar to Sterling Bank, which pitched its core banking technology SeaBaaS, to MTN’s fintech subsidiary, Momo, in 2023. Like most neobanks, Kuda remains in a high-growth phase that demands significant capital. However, it still has time—Monzo and Nubank took nearly a decade to turn profitable. With its latest funding, Kuda has secured more runway, yet it will need to reduce operating costs ($44.8 million) while driving sustainable growth.
Read MoreWema Bank now industry’s best-paying lender after new salary bump
Wema Bank, a Nigerian commercial lender with a market capitalization of ₦260.38 billion, has implemented a salary increase for its over 1,700 employees, effective March 2025, according to three people familiar with the matter. While the bank has not publicly disclosed the percentage of the adjustment, it follows similar salary hikes across Nigeria’s banking sector as lenders compete for talent amid economic challenges. The revised pay structure at Wema Bank significantly boosts salaries across multiple levels, making it the best-paying bank in Nigeria at several job tiers. Executive trainees, previously earning ₦255,000 per month, will now start at approximately ₦541,000—a 112% increase. Assistant banking officers will see their pay rise from ₦681,000 to ₦830,000, while banking officers’ salaries will climb to ₦1.015 million from ₦875,000. Senior banking officers, who previously earned ₦1.07 million, will now take home upwards of ₦1.2 million per month, outpacing tier-1 banks like Access Bank, where senior banking officers earn ₦1.1 million. This marks Wema Bank’s second major salary increase in under two years. In July 2023, the bank implemented a 45% salary hike across all employee levels, citing inflation and the rising cost of living following government reforms that exacerbated economic hardship. Wema Bank’s salary adjustments come amid intensifying competition for skilled professionals. Many Nigerian banks are struggling with high employee turnover, as fintech startups lure banking talent with higher pay, flexible work environments, and stock options. Additionally, an ongoing brain drain has seen thousands of financial professionals relocate abroad in search of better opportunities, further tightening the local talent pool. To remain competitive, several other banks have also adjusted salaries. In late 2024, Guaranty Trust Bank (GTBank) raised staff salaries by 40%, while Union Bank followed with a similar increase. In January 2025, Sterling Bank implemented a 7% pay adjustment after previously introducing a cost-of-living allowance (COLA) to help employees cope with rising expenses. Wema Bank did not immediately comment on the latest salary adjustments. As Nigeria’s economy continues to grapple with headline inflation, banks are likely to keep reviewing salaries to retain and attract employees. However, higher payroll costs could also squeeze profit margins, making it crucial for banks to balance competitive salaries with sustainable financial performance.
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TechCabal Daily – Vendease to cut 120 jobs
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! If you’re young and Nigerian, Microsoft has you in mind. The Big Tech company is investing $1 million to train 1 million Nigerians in AI and digital skills over the next two years, building on its previous efforts to upskill talents in the country. While Microsoft presents this as a way to give back, it also makes good business sense. As more people and companies start using AI, having a larger group of skilled professionals means more potential customers or employees for Microsoft in the future. Vendease to cut 120 more jobs How crypto startups survived Nigeria’s 2021 ban Kuda Group grew revenue to $32 million Kenya to regulate boda boda riders World Wide Web 3 Events Layoffs YC-backed Vendease to cut 120 more jobs in the second round of layoffs Image source: Vendease Vendease, a Partech and YC-backed food procurement startup operating in six Nigerian cities, has implemented its second round of layoffs in five months, according to a company spokesperson. The cuts, which begin today, are part of a restructuring effort aimed at achieving profitability and extending the company’s runway as it seeks to close a Series A extension round. The first, in September 2024, impacted 86 employees, about 20% of the staff. About 120, 35% of staff, will be let go in the recent second round. “Streamlining isn’t one bite of a cherry. You have to do it in stages,” Mohamed Chaudry, the company’s chief financial officer told TechCabal. While declining to specify the number of employees impacted by the current cuts, Chaudhry stated that the reductions will result in a “lean team.” Like many Nigerian startups, Vendease—which has raised $72 million since its founding—is grappling with macroeconomic headwinds including Naira devaluation and rising inflation, which have increased operational costs across its supply chain. Despite growing revenue by 600% year-on-year in the past two years, the company’s growth remains stunted in dollar terms. Beyond layoffs, these pressures have also forced the company to reassess its business model. A key change has been the repurposing of its buy-now-pay-later (BNPL) product from a loss leader to a revenue generator. Previously, Vendease offered flat-fee financing for food purchases, absorbing interest costs for long-term loan payments. The company now charges daily interest, allowing it to profit from lending while customers pay pro-rata interest. “Vendors were willing to wait four days for goods from Vendease, even with instant-purchase options from other suppliers, because of the access to credit,” Chaudhry explained. Vendease has also implemented in-house AI technology to automate previously manual processes like demand and resource planning, in a bid to improve capital efficiency. Vendease’s investors, including Greenlights Ventures, Partech, Realm Capital Ventures, TLcom Capital, VentureSouq, Hustle Fund, and Hack VC, are supportive of the company’s pivot, Chaudhry said, adding that many have committed to participating in the ongoing Series A extension. The company declined to disclose the target extension raise but noted that the extended runway, coupled with the new funding, will enable the company to achieve the milestones necessary for a Series B round. Collect payments Fincra anytime anywhere Are you dealing with the complexities of collecting payments in NGN, GHS or KES? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. Get started now. Cryptocurrency How Nigeria’s 2021 ban crushed crypto startups and forced others to adapt Image Source: Wunmi Eunice/TechCabal Policies have consequences, and one glaring highlight in Nigeria’s recent history was the “crypto ban” in 2021. If you’re not caught up, the story goes like this: the Central Bank of Nigeria (CBN) had been wary of Bitcoin for years, siding with most global regulators at the time. The internet called the digital currency a “bubble waiting to burst.” In 2017, the CBN issued its first clear warning on digital currencies like Bitcoin and Litecoin, rightly calling them a conduit for “terrorism financing and money laundering” due to their anonymity. That fateful year, Bitcoin made its first big splash, surpassing the $10,000 mark, partly thanks to the Mavrodi Mondial Moneybox (MMM), a Ponzi scheme that introduced Nigerians to crypto payments. At the same time, blogging was growing rapidly in popularity. Young Nigerians who could string together coherent sentences jumped on platforms like Steemit and Publish0x, which paid in digital currencies, further raising awareness of these odd crypto monies. Seeing a business opportunity around this crypto awareness, local startups started building platforms to help Nigerians buy, sell, earn, and learn more about crypto. It was still a Wild West industry, so scams and fund losses were a major feature of the early stages of this sector, leaving regulators skittish. However, the hope of turning huge, outsized returns exceeded the risks for many Nigerians. So, they kept trooping in; crypto startups kept popping up everywhere, often with platforms that focused on blitzscaling first before security. Then, another bull market cycle happened in 2020. This time, the CBN, wary of banks being tempted to get involved in trading the volatile asset and risking customers’ deposits, issued a directive in 2021 for them to cease providing banking services to crypto companies, effectively ending a growing industry that relied on banks to manage liquidity. Crypto startups have had to find grey areas ways to innovate around the ban, adapting their businesses to go with the tides. In 2021, there were about 42 local and Africa-focused crypto startups operating; 26 of them folded. Today, the ones left to bear the scars of a tumultuous era carry the weight of the story. Nigeria may be the closest it has ever been to regulating crypto, yet it was just as far from doing so only four years ago. Read TechCabal’s coverage of how crypto startups survived Nigeria’s crypto ban in 2021. You can now Pay with Opay on Paystack Checkout Paystack merchants in Nigeria can now accept payments from over tens of millions of OPay users through Paystack Checkout. Find out more here→ Fintech
Read MoreKuda Group grew revenue to $32.1 million in 2023 as total losses jumped to $40 million
Kuda Group, the holding company of Nigerian neobank Kuda Bank, reported $32.1 million in revenue (including other income) for 2023, falling short of its projected $40 million target. Despite this shortfall, the bank achieved a 49% increase from the $21.5 million in revenue reported in 2022. This growth was despite the naira’s 40% devaluation against the dollar in 2023. Kuda’s app user base also expanded to 7.2 million in 2023, a 47% rise from 4.9 million in 2022. However, total losses grew to $40 million in 2023, up from $18.5 million in 2022. These losses were primarily due to increased staffing and operational costs, including $8 million in salaries for 456 employees. Neobanks often lose money during the initial growth phases as they acquire customers and invest in product development while operating with limited revenue—Kuda is no exception. Monzo lost $143 million in 2020, while Revolut lost $135 million in 2019. Ex-Kuda executive sues over gender discrimination, wrongful termination allegations By the end of 2023, Kuda held $5 million in cash against annual operating costs of approximately $55 million. The bank’s liquid assets sufficiently cover customer deposits, providing a buffer exceeding $20 million. Auditors determined that the business is not exposed to short-term going concern risks; however, additional capital may be needed to cover operating expenses. In 2023, Kuda began talks to raise a $20 million bridge round at its 2021 Series B valuation of $500 million but did not close the round. Since its 2019 inception, Kuda has raised over $81 million in funding. CEO Babs Ogundeyi told shareholders that additional capital will be required to pursue its strategy, and efforts are underway with potential investors to secure further funding. Kuda did not immediately respond to a request for comments. Given its last publicly disclosed valuation of $500 million, Kuda’s revenue multiple is 23x—significantly higher than that of publicly traded neo banks like Nubank (10x), Monzo (5.4x), and Revolut (20.5x). Kuda primarily makes money through: Interest on customer loans ($9 million in 2023). Returns from treasury investments and fixed deposits ($8 million). Fees from banking services ($4.5 million). Commissions from partners ($8.3 million). The bank’s lending model remains conservative. In 2023, it issued $12.6 million in overdrafts and reduced its credit loss allowance—the funds set aside for potential loan defaults—from $12.4 million to $10.4 million. The bank currently has $96 million in customer deposits and total assets worth $125 million, a slight uptick in customer deposits from 2022’s $94 million but a decline in assets from $140 million. However, its customer deposits pale in comparison to some of Nigeria’s tier-2 commercial banks like Unity Bank, with $1.35 billion, and Wema Bank with $1.9 billion.
Read MoreExclusive: Vendease cuts 120 jobs in second round of layoffs
Vendease, a Y Combinator-backed food procurement startup operating in six Nigerian cities, has implemented its second round of layoffs in five months as part of a restructuring effort to achieve profitability and extend its financial runway. A company spokesperson confirmed the layoffs to TechCabal, saying the move aligns with the startup’s shift toward a more capital-efficient model while it seeks to close a Series A extension round. The latest layoffs, which begin today, will affect about 120 employees (35% of staff). This follows a previous round in September 2024, which impacted 86 employees (20% of staff). “Restructuring takes time and happens in phases,” Mohamed Chaudry, Vendease’s Chief Financial Officer, told TechCabal. He said the company is moving toward a “lean team” to improve operational efficiency. Despite raising $33 million since its founding in 2019, Vendease has struggled with macroeconomic headwinds, including naira devaluation and rising inflation, which have significantly increased operational costs. The company did not disclose how much of the $33 million remains or how it has been allocated. While the company claims revenue has grown 600% year-on-year over the past two years, revenues have likely remained flat in dollar terms, possibly hindering expansion. Beyond staff reductions, Vendease is making key strategic shifts to improve financial sustainability. A major change involves repurposing its buy-now-pay-later (BNPL) offering from a loss leader to a revenue-generating product. Previously, the company absorbed interest costs for long-term loan payments, allowing customers to finance food purchases at a flat fee. Now, it has switched to a daily interest model, enabling Vendease to profit from lending while customers pay pro-rata interest. “Vendors were willing to wait four days for goods from Vendease, even with instant-purchase options from other suppliers, because of the access to credit,” Chaudry explained. The new model aims to monetize this demand while improving cash flow. In addition to restructuring, Vendease has introduced in-house AI technology to automate previously manual processes, such as demand forecasting and resource planning. The company claims this shift is improving capital efficiency, though it has not disclosed specific cost savings or performance metrics. Vendease’s investors—including Greenlights Ventures, Partech, Realm Capital Ventures, TLcom Capital, VentureSouq, Hustle Fund, and Hack VC—are supportive of the company’s pivot, according to Chaudry. He added that several investors have committed to participating in the ongoing Series A extension round, though Vendease declined to disclose the target raise. While Chaudry stated that the extended runway and incoming funding will help Vendease achieve the milestones necessary for a Series B round, he did not specify what those milestones are. Given the company’s challenges, profitability and sustained growth in dollar terms will likely be key hurdles. Vendease’s restructuring underscores a broader trend among Nigerian startups adjusting to economic realities—focusing less on rapid expansion and more on profitability, efficiency, and sustainable business models. Ngozi Chukwu reports on e-commerce for TechCabal. She can be reached at ngozi@bigcabal.com or on X, @NgoziChukwu_.
Read MoreBreaking: Microsoft pledges $1M to train 1M Nigerians in AI
Microsoft has announced a $1 million initiative to train 1 million Nigerians in artificial intelligence (AI) and digital skills over the next two years. The announcement, made at an event in Lagos on Wednesday, underscores the company’s expanding role in Africa’s AI ecosystem as it seeks to equip young Nigerians with skills for the evolving global economy. The program will be led by Microsoft Nigeria in collaboration with Tech4Dev, Data Science Nigeria, and other partners. Microsoft executives emphasized AI’s transformative potential on the continent, positioning the initiative as a step toward preparing Africa’s workforce for future jobs. However, the ambitious scale of the project—training 1 million people with just $1 million—raises feasibility concerns. That equates to $1 per trainee, prompting questions about the depth and quality of training offered. Microsoft has not fully disclosed the structure of the training program. It remains unclear whether it will focus on introductory AI awareness, hands-on technical training, or industry certifications. Olatomiwa Williams, Managing Director of Microsoft Nigeria and Ghana, suggested that Microsoft will build on previous AI upskilling efforts in Nigeria. “We are thrilled to bring our mission to life by investing in Nigeria’s talent. Our goal is to empower every person and organization to achieve more, and this investment is a step towards ensuring that Nigerians are equipped to harness the opportunities presented by the fifth industrial revolution, which AI drives,” said Williams. Williams also noted that Microsoft has worked with Nigerian AI startups in the past and claims the company has reached 4 million Nigerians through its digital skills programs since entering the country. Microsoft is not the only Big Tech firm betting on Nigeria’s AI future. In October 2024, Google announced a ₦2.8 billion ($1.7 million) grant to support AI talent development in Nigeria. This was part of its broader $5.8 million digital skills commitment across Sub-Saharan Africa. Google’s program is focused on deep AI research and startup development, while Microsoft appears to prioritize mass upskilling. However, Google’s funding surpasses Microsoft’s despite its smaller target audience. Microsoft sees AI as a key economic driver for Africa, with the potential to add $15 billion to Nigeria’s GDP and $1.5 trillion to the continent’s economy by 2050. “There is an IDC study that found that for every $1 invested in AI, businesses could expect to see a return of $3.5,” said Lilian Barnard, President of Microsoft Africa. “It’s important that we start making sure that we tick the boxes on economic growth, business return on investment, and opportunities for upskilling and reskilling.” While Microsoft frames this as a social investment, the initiative also aligns with its strategic business interests. With AI adoption rising, companies like Microsoft stand to benefit from a larger pool of skilled professionals who could become future customers or employees. The initiative could also help drive adoption of Microsoft’s AI tools and cloud services among Nigerian developers and businesses.
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