After its funding ran out, Zumi, a Kenyan e-commerce site that sold non-food items, shut down, adding to the growing list of digital businesses that have failed recently in Kenya.
William McCarren, the company’s co-founder and CEO announced on LinkedIn that at least 150 individuals would lose their jobs due to the move. This was because the company had trouble acquiring money, jeopardise its capacity to stay in business.
With a heavy heart, I must tell you that Zumi is leaving the business. The current economic situation has made it very hard to raise money, and our business was unable to become self-sufficient in time to survive,” McCarren noted.
Since its start in 2016, Zumi has raised more than $920,000 (Sh120 million) in investments, according to Crunchbase. McCarren says the company has had over 5,000 customers and made more than $20 million (Sh2.6 billion) in sales during that time.
Zumi started as a digital magazine for women, but when it could not make enough money from digital ads, it left the media sector and went into e-commerce instead.
The company’s decision to close is part of a pattern of promising technology companies going out of business one after the other, with most of them citing tough market conditions and money problems.
In the last year, Kune Foods, Notify Logistics, WeFarm, BRCK, and Sky-Garden went out of business, putting hundreds of people out of work. This is the eighth Kenya-based tech start-up to go out of business.
On the other hand, Sendy shut down Sendy Supply, a place where retailers and suppliers could trade, and cut its staff by 20% in October.