Kenyan food-tech startup Kune Food is shutting down. Kune which officially began commercial operations with four meal hubs located in strategic locations in Nairobi is leaving the market due to insolvency, TechTrendsKE has learnt.
Kune CEO Robin Reecht told employees in an impromptu meeting held today that the startup had run out of money after an investor pulled out.
“As you know we were supposed to receive an investment of about Ksh30 million from a French investor. Yesterday, I learned from that investor that they will not invest that money, why on one side because we are already running out of money, the is not reassuring for them,” he said.
”I spoke to 100 investors at least since the beginning of the year. I have exhausted my options. Am just not able anymore to raise money, it’s impossible.” he added.
Earlier this month, we reported that something was not right with the food tech startup.
When Kune Food raised $1 Million in pre-seed funding in June 2021, it seemed to have a grand plan that would differentiate its food-delivery model from similar existing services in Kenya. At the time, Kune said that it would control the entire food chain and intermediary processes.
That dream seems to be dead now. In fact, on food delivery platforms such as Bolt Food, Kune is temporarily not accepting orders.
The CEO even says he tried looking for a buyer but was unsuccessful.
”I looked for some companies to buy Kune. I spoke to the CEO of Java, ArtCaffe, Nas Servair, Bidco and several others, no company is interested to buy Kune. Why they are not interested? They think we built a very strong brand that is very recognised…but at the same time they think what we built is not strong enough to justify a purchase.” the CEO told employees.
”We don’t sell enough meals every day, we are still a niche product and so I was unable to find an acquirer. Which I was trying to do to prevent you from losing your jobs and other investors from losing their money and the company.” he added.
In February, Kune’s managing director Faith Mwendia had told a local publication that they were seeking a further $3.5 million from local and international investors to increase production capacity.
The company’s desire to be an end-to-end food delivery service has certainly hit a snag.
Update – Comment from Kune CEO
In a post on his LinkedIn page, Kune CEO Robin Reecht says ”…With the current economic downturn and investment markets tightening up, we were unable to raise our next round. Coupled with rising food costs deteriorating our margins, we just couldn’t keep going.”
Since the beginning of the year, he says the startup has sold more than 55,000 meals, acquired more than 6,000 individual customers and 100 corporate customers. But at $3 per meal, he says it just wasn’t enough to sustain the company’s growth.
”Many things could have been done differently, better certainly. The coming months will allow us to reflect on Kune’s failure, and I hope to share about it when the time will be right,” he says.