Kenya-based Twiga secures $35m via convertible bond
Last Thursday, Peter Njonjo, the CEO of Twiga, a Kenyan startup facilitating connections between farmers and food vendors, announced his decision to take a six-month sabbatical from the company. This announcement has raised concerns that external pressures, possibly from investors, may be influencing his departure.
Njonjo's decision comes just two weeks after Twiga secured new funding, raising $35 million in convertible bonds. These bonds, a form of debt with interest payments that can be converted into equity, were provided by Creadev and Juven, both private equity investors who had previously invested in Twiga. The specifics of the funding, such as its size and terms, had not been disclosed previously.
The timing of Njonjo's sabbatical and the recent fundraising success coincide with efforts by Twiga to settle outstanding debts, particularly to suppliers. Notably, Incentro, a cloud service vendor owed by Twiga, had sought court intervention for liquidation proceedings to compel the startup to settle its debts. Ongoing private discussions between Twiga and Incentro are aimed at finding a resolution to the dispute.
In August of this year, Twiga Foods undertook a significant workforce reduction, parting ways with one-third of its 850 permanent employees. Njonjo attributed the decision to challenging market conditions and the company's commitment to maintaining a streamlined and efficient organization adding that Twiga's cost structure was initially designed in anticipation of expanding across Africa. However, due to increased interest rates in the US impacting available capital for investments in emerging markets, the company opted for a short-term strategy to sustain operations. This strategy involved implementing a 40% reduction in operating costs rather than increasing prices. Looking ahead, Twiga aims to advance its mission of digitizing the informal retail economy and revolutionizing food supply chains in Africa.