Kenyan e-commerce startup Sky.Garden is set to close amidst the global funding winter for failure to raise funds, three months after food tech Kune shut down due to similar reasons.
The CEO of Sky.Garden, Martin Majlund sent termination notices to employees after a town hall meeting and revealed that the company was running out of funds and would close down on October 16. Majlund adds that the company is still operational “Sky.Garden Limited is still solvent and operations are still ongoing.” which is evident because their website is still active as of today’s date.
Sky.Garden is an online shopping platform and marketplace leading the eCommerce space in Kenya. The platform connects small businesses to buyers in an end-to-end system that encourages DIY process. It is said to be a well-known brand in locations like Nairobi, providing 24-hour delivery of purchased products.
Sky.Garden Had Raised $5.2 Millon Since 2018
Sky.Garden announced the closing of a $4 million Series A investment round in June 2021 to fuel its expansion, building on its $1.2 million seed capital from the previous year 2018. Since its debut in May 2017, the e-commerce business has raised $5.2 million but appears to have difficulties in securing venture capital to keep up operations.
According to the CEO, he still believes there is hope and despite the fact that the startup is facing a funding crisis, they are looking for a solution.
“We are in dialogue with potential investors and acquirers but as we have to be diligent about doing things the right way, we chose on September 16th to give our staff 30 days’ notice while working on our opportunities,” said Majlund.
The CEO continued to state that 2022 has been a struggle for the overall global market. “We have therefore for a while been in deep M&A conversations. But we are not the only ones being hurt by the macro-economic contractions which have had a negative implication on the timeline of these conversations leaving us in the above-mentioned situation.”
“Rising prices, inflation, the war in Ukraine and increased interest rates have made the venture capital space very challenging, especially being a B2C e-commerce business,” the CEO said.
Similarities To Kune
Kune is also another Kenyan startup that was founded in December 2020 with the goal of providing ready-to-eat and inexpensive meals. The company did a trial in Kenya in the early months of 2021 before starting up for real in the latter part of the year. It had the same problem as Sky.Garden, and had to shut down operations in June 2022 due to a lack of funding.
The startup’s founder and CEO, Robin Reecht, announced the closure in a LinkedIn post, blaming the “economic crisis and funding markets tightening up.”
NB: Sky.Garden closure is a developing story, more information will be added when available
