Kenyan food-tech startup, Kune Foods, is preparing to shut down operations in the Kenyan market. This comes in around 4 months since they announced the official commencement of commercial operations. The startup has run out of money after an investor pulled out, this is according to their CEO in a company meeting earlier today.
“As you know we were supposed to receive an investment of about Ksh30 million from a French investor. Yesterday, I learned from that investor that they will not invest that money, why on one side because we are already running out of money, the is not reassuring for them,” he said.
Kune Foods To Shut Down Operations In Kenya
Just a few weeks ago, Kune Foods was in the news because of their sudden change of operating model. Kune Foods moved from their app and website, to be exclusively available via delivery Apps. These are the likes of Glovo, Jumia Foods, Uber Eats and Bolt Food. The reason was not clear, since their goal at the beginning was to disrupt these same players.
Last year, Kune Foods announced a $1 Million pre-seed funding, used in expanding their factory capacity and boosting delivery strategies. In February this year, they said they were seeking an additional $3.5 million to increase production capacity.
At its prime, Kune was delivering over 400 meals a day, with a projection to be serving over 1,000 meals into the near future. It appears that their recent change of operating model was not so much inspired by better strategy, but based on looming tragedy. Now, insolvency is the final destination of the startup’s journey.
“We don’t sell enough meals every day…We are still a niche product and so was unable to find an acquirer. Which I was trying to do to prevent you from losing your jobs and other investors from losing their money and the company.” Kune CEO told his employees.
UPDATE: Statement from Kune Foods CEO through LinkedIn
Sad day. Kune Food closed down today.
Since the beginning of the year, we sold more than 55,000 meals, acquired more than 6,000 individual customers and 100 corporate customers. But at $3 per meal, it just wasn’t enough to sustain our growth.
With the current economic downturn and investment markets tightening up, we were unable to raise our next round. Coupled with rising food costs deteriorating our margins, we just couldn’t keep going.
My first thoughts go to my team. You put your heart and soul into building the Kune that so many people loved. I’m deeply sorry it didn’t work out.
To all my fellow entrepreneurs, please check the Kune “employee page” on LinkedIn and see if your recruitment needs could be filled by some of our team members. I know those are difficult times for you too. But they are terrific people who will bring tremendous value to your company. You can call me if you need any reference on a Kune employee.
My second thought goes to our investors. Some of you joined the Kune journey when it was just me and a Chef, delivering food on foot to a nearby office. Some others joined later and helped us grow into a foodtech startup with a tech platform, a factory, a kitchen studio, 7 distribution hubs, 6000 customers, and a team of 90 people. Not only did you invest in Kune but you gave us your time, brain-width, connections, and emotional support. I am deeply sorry that Kune’s vision didn’t come true. To betray your confidence is something for which I will never forgive myself.
My third thought goes to suppliers, customers, bankers, and partners of any sort who supported us along our way. I’m sincerely sorry for the outcome.
Many things could have been done differently, better certainly. The coming months will allow us to reflect on Kune’s failure, and I hope to share about it when the time will be right.
If you know anyone who could be interested to acquire Kune’s IP or Assets, please reach out by PM.