Vendease, a Nigerian food procurement startup backed by Y Combinator, has recently made significant changes to its employee pay structure and is actively seeking fresh capital, according to reports from TechCrunch. This comes on the heels of the company laying off 44% of its workforce, approximately 120 employees, in its second round of job cuts in five months.
The startup, which secured $30 million in its Series A funding round led by Partech Africa and TLcom Capital, has shifted to a performance-based pay system and introduced an Equity Share Option Plan (ESOP) in order to steer towards profitability. The new compensation model includes a five-phase salary recovery plan, with employees receiving a reduced salary of ₦140,000 (~$90) in February, regardless of their previous pay. Subsequent months will see incremental increases in wages based on performance targets, with the goal of fully restoring salaries by December.
As part of the restructuring, any unpaid portions of salaries will be converted into share options under the ESOP, with vesting periods ranging from ten months to three years. Vendease has emphasized that these changes are essential for the company to achieve financial sustainability and focus on software-driven growth.
With a reduced workforce of just over 150 employees, Vendease is banking on internal restructuring, additional capital infusion, and leveraging AI-driven efficiencies to streamline operations and reduce costs. The company plans to concentrate on software solutions, sales, payments, and its credit marketplace while gradually phasing out warehousing and logistics operations.
One of Vendease’s key revenue drivers in recent years has been its buy now, pay later (BNPL) product, which has enabled the startup to underwrite loans for food businesses through its marketplace. Despite the success of the BNPL offering, the company is exploring additional avenues to achieve profitability, including potential fundraising efforts and discussions with investors.
As Vendease navigates through these changes and challenges, the company remains committed to its mission of streamlining food procurement for African restaurants and food businesses. While reports of potential acquisition offers have surfaced, Vendease’s founders are focused on scaling the business and are not currently entertaining the idea of selling the company.
