Emerging and Growth Markets | December 14, 2023

Investors back Copia with fresh capital to right the ship

Lucy Ngige and Jessica Pothering
Guest Author

Lucy Ngige

ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, December 14 – The wave of investment in digitizing informal businesses in emerging markets produced overfunded startups, artificial valuations and unproven business models. Kenyan e-commerce company Copia is seeking to recover from the fallout.

The company raised more than $100 million to offer a catalog of products to people living outside standard delivery areas; more recently, it has instituted multiple rounds of layoffs and pulled out of the Ugandan market.

Investors are re-upping their commitment to the company with a $20 million Series C extension round. Investors include Enza Capital, Goodwell Investments, LGT Group, the DFC, Germany’s DEG, Sorenson Foundation and others.

Path to profitability

Startups are finding that the “growth at all costs” doesn’t work when funding is scarce. Investors expect clear pathways to profitability.

“E-commerce companies are facing some difficulties at the moment,” said John Lazar, former CEO of Microsoft-owned Metaswitch, who joined Copia’s board.

Food logistics company Twiga this year slashed staff and field agents after a dizzying number of business pivots. CEO Peter Njonjo recently acknowledged high rates of cash-burn and “loss of strategic clarity”.

Copia’s new strategy involves digitizing its network of field agents who support rural customers in placing and securing orders. It also announced a partnership Visa to let friends and family members overseas to pay for goods with a digital wallet.

The “push towards digitization feels like an inflection point for us,” Lazar told TechCrunch. “It just changes the game on unit economics and efficiencies.”