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Ghana saw the exit of Vendease in the year 2024, following a year-long pursuit of expansion in the region.

Nigerian food supply startup Vendease shut down operations in Ghana in October 2024, less than a year after launching there with significant funding. This development is significant, as Ghana marked Vendease's first major international venture. The swift departure highlights the obstacles...

"In 2024, Vendease left Ghana following a full year of growth and expansion attempts"
"In 2024, Vendease left Ghana following a full year of growth and expansion attempts"

Ghana saw the exit of Vendease in the year 2024, following a year-long pursuit of expansion in the region.

Vendease, a Nigerian food supply startup, has announced the end of its operations in Ghana, effective October 2024. The company, which launched in Ghana in 2023 with a $30 million Series A round, faced difficulties in sustaining cross-border operations, joining a growing list of African eCommerce startups encountering similar challenges.

Initially, Vendease aimed to replicate its B2B food supply marketplace success from Nigeria in Ghana. However, the company could only fulfill about 25% of its weekly orders due to capital constraints. Attempts to raise local financing in Ghana fell through, leading to the company's withdrawal.

The struggle to sustain cross-border operations is attributed to the challenges in the African eCommerce sector. Low margins, high logistics costs, and a shaky financing ecosystem continue to pose major obstacles for Vendease.

Before Mohamed Chaudry's appointment as the new CFO in 2024, the wage bill of Vendease was over $650,000. Chaudry implemented stricter payment policies and wage cuts to address the capital constraints. The company also implemented a 20% workforce reduction in 2024.

Vendease's BNPL product issued over $72M in loans, but saw widespread defaults. In an effort to address these issues, Vendease shifted towards prepaid/short-term credit models, indicating a change in its financial approach.

Despite these challenges, Vendease's repayment rates are now above 95% after the shift to prepaid/short-term credit models. The success of Vendease in repayment rates suggests improvements in its financial management strategies.

Initially, Vendease fulfilled every order, even at a loss, but later focused on high-margin deliveries. This shift in focus may have contributed to the company's ability to manage its capital constraints more effectively.

It is worth noting that Vendease faced no direct regulatory or reputational issues in Ghana, unlike other companies mentioned in the search results. The company's involvement in initiatives like OpenSauce indicates ongoing marketing or community engagement activities.

In conclusion, despite strong capital backing and promising early results, Vendease's failure to sustain operations in Ghana arose from internal management conflicts and operational difficulties in a complex new market rather than lack of funding or initial market opportunity. The company is now focusing on building sustainably without relying on venture funding and betting on its software suite to drive revenue.

In the face of capital constraints, Vendease struggled to meet weekly orders, a challenge compounded by the shaky financing ecosystem in the African eCommerce sector. The company, originally aiming to replicate its success from Nigeria in Ghana, turned to business strategies like focus on high-margin deliveries, stricter payment policies, and prepaid/short-term credit models to manage its financial technology issues.

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