UPDATED: iProcure co-founders work with new tech owner to restore services

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October 15, 2024
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2 min read
iProcure team

EDITOR'S NOTE [Wednesday, October 16, 2024]: iProcure, a Kenyan agritech company, did not re-acquire its technology to revive operations, contrary to reports by Launch Base Africa. Instead, the co-founders of iProcure are collaborating with the company that acquired its technology to restore services, as they possess the expertise required to operate the company's systems. iProcure remains in administration following its bankruptcy filing. The article has been properly worded to communicate this.

Contrary to reports by Launch Base Africa, Kenyan agritech startup iProcure did not re-acquire its technology to revive operations. Instead, the startup's co-founders are working collaboratively with the company that acquired its technology to restore services, as they possess the necessary expertise to operate the company's systems.

The company has been under administration since April 26, 2024, after failing to meet its financial obligations to creditors. In May, it filed for bankruptcy after unsuccessful attempts to secure additional funding from existing and new investors, despite previously raising $17.2 million. 

Co-founder and CEO Stefano Carcoforo confirmed to a Kenyan court that the company required bankruptcy protection due to these financial difficulties.

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At the time, KPMG’s advisory arm was appointed as the administrator to help revive the startup, with liquidation as a potential final option if these efforts fail to settle the company's debts.

Launched in 2012 by Stefano Carcoforo, Nicole Galletta, Patrick Wanjohi, and Bernard Maingi, the startup connects agricultural manufacturers and distributors to local retailers (agro-dealers) through its unique distribution infrastructure that connects agricultural supply chains.

In August 2022, iProcure secured $10.2 million in Series B funding to support its expansion across East Africa. Recently, at a Mercy Corps AgriFin event, Carcoforo stated that the company had reported annual revenues of up to $14 million and strong unit economics at that time, according to Launch Base Africa.

READ MORE   Kenya’s B2B agritech, iProcure, raises $10.2 million Series B to expand to Tanzania

However, the influx of capital brought new pressures. He noted that while iProcure was profitable, heightened expectations from investors necessitated the hiring of new management at higher salaries, leading to a 130% increase in the wage bill and subsequent financial strain.

The company's downfall was further exacerbated by strategic missteps, particularly its heavy reliance on the fertiliser market, which suffered a 60% market loss due to government subsidies. 

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Carcoforo admitted that, despite advisors' advice to diversify and develop proprietary brands, the company did not act quickly. Additionally, foreign-denominated debt became increasingly burdensome as the Kenyan shilling depreciated.

By September 2023, iProcure's financial situation deteriorated to the extent that it could no longer meet payroll. In April 2024, the company was placed into administration, with KPMG Advisory Services appointed to oversee the process.

Despite this formal collapse, co-founders remained determined. Carcoforo stated, “We lost the company, but the fight didn’t end there.”

She's autistic and interested in mental health and how technology can help Africans with mental disorders. Find her on Twitter @latoria_ria.
She's autistic and interested in mental health and how technology can help Africans with mental disorders. Find her on Twitter @latoria_ria.
She's autistic and interested in mental health and how technology can help Africans with mental disorders. Find her on Twitter @latoria_ria.
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