Kenyan agritech iProcure under administration over debt issues despite raising $17.2 million
The news:
- iProcure, a Kenyan agritech company that connects agricultural product distributors to manufacturers, has been placed under administration since April 26, 2024, following failure to pay creditors.
- Effectively, the administrator — KPMG’s advisory arm — has been appointed by the court to revive the Safaricom’s Spark Fund-backed startup.
- If the intervention to put the company back on track fails, liquidation will be considered a final resort to enable the company to pay creditors their money.
Makenzi Muthusi of KPMG Advisory Services will indefinitely lead the company, managing all iProcure’s affairs, including properties and operations. The administrator’s role will also include handling all creditors’ claims.
“Any party having a claim against the company should submit their claim in writing, with relevant supporting documentation to the Administrator on or before 14 May 2024 for consideration,” a portion of the notice released by KPMG read.
The document also noted that the former directors of the company would no longer have any power or authority to deal with any matter concerning iProcure.
Stefano Carcoforo, Nicole Galletta, Patrick Wanjohi and Bernard Maingi all co-founded iProcure in 2013 to connect suppliers and retailers to aid the distribution of agricultural inputs like fertilisers.
Additionally, the Nairobi-based firm also assists all players in the chain with access to inventory management and credit facility services.
Since its inception, the agritech has raised $17.2 million from investors in five different rounds to improve its service offerings and expand across East African markets.
A major one was the $10.2 million (~KSh 1.2 billion at the exchange rate then) it raised in Series B funding and conventional debt in August 2022 to expand to Tanzania.
Before then, in March 2023, the startup secured $1.2 million from the United States Agency for International Development (USAID) as part of a $5.1 million grant the agency gave seven agriculture firms in Kenya to support food production.
It remains unclear why the company is on the verge of collapse, how much it owes creditors, and why its significant fundraising efforts didn’t count towards its sustainability.
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A former employee who spoke to a Kenyan-based new outlet disclosed that among several other challenges, iProcure has been battling cashflow issues coupled with a high burn rate.
In a management change it hoped would secure the company’s future, iProcure appointed Niraj Varia, a former partner at Novastar Ventures, as Group CEO in 2022.
When reached for comment, Varia who left in 2023, said he had “no more information than is in the public domain.”
iProcure has yet to say anything about the matter, although its court-approved administrator, Muthusi, has commented on the new development.
