Kenyan E-commerce startup SkyGarden will shut down on October 16 after failing to close a round of financing. SkyGarden had raised over $5.2 million (Ksh620 million) since its launch in 2017
TechCrunch reports that the company, through its founder Martin Majlund, sent termination notices to employees earlier this month.
Majlund has however denied the reports, indicating that the company is in talks with investors to save the venture from sinking.
“Sky.Garden Limited is still solvent and operations are still ongoing. 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 Maljund.
Read: Kune Food Closes Shop Months After Raising Ksh100 Million Seed Funding
“Rising prices, inflation, war in Ukraine and increased interest rates has made the venture capital space very challenging, especially being a B2C e-commerce business,” Majlund noted. “We have therefore for a while been in deep M&A conversations. But we are not the only ones being hurt by the macroeconomic contractions which have had a negative implication on the timeline of these conversations leaving us in the above-mentioned situation.”
Sky.Garden raised $4 million in a Series A round of funding last year, bringing the total amount it had raised from VCs to $5.2 million.
The startup has been around since 2017 and has thousands of small and medium-sized businesses selling through its online marketplace. The startup ensures “end-to-end” fulfilment of orders and earns an 8% commission for every sale made through its platform.
According to LinkedIn, the company has only 46 employees.
This comes weeks after Kenya-based cloud kitchen Kune Food closed shop months after raising USD 1 million (Ksh117 million) in seed funding, affecting 90 employees who were employed by the company.
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