Twiga Foods has been sued for failing to pay KES 39 million ($263,691) as compensation for Google Cloud Services and Partner Service Funds that was given by Kenyan Google Premier Partner, Incentro Africa.
The agritech has raised at least $157.1 million from about 23 investors since its launch over the course of 19 rounds. Its most recent round, a $50 million Series C, was closed in November 2021, and a $30 million sale provided some of its early investors with liquidity. However, the agritech startup has now been hit with an insolvency notice.
The notice that was due to expire on Monday (September 25) stated, “Further take notice that failure to pay aforesaid amount shall result in Incentro Africa Limited filing for liquidation order against you.” The requests, according to Twiga Foods, are “premature” and made “in bad faith and with a hidden agenda.”
Whether Incentro should proceed with the liquidation or not would depend on the court’s order. The Kenyan agritech business has reportedly filed a certificate of urgency to prevent any liquidation actions, according to local media outlet Nation.
The economic slump has affected numerous startups, including the agritech one. It recently let go of 283 workers. Although it was rumored that the business planned to terminate its operations in Uganda, CEO and co-founder Peter Njonjo refuted it. “Operations are not being shut down. Our farm is still running, and we are still in operation in Uganda,” he stated.
“Over the past few months, the company has made critical operating modifications to improve its capacity for service delivery. The startup said in a statement that it changed its sales methodology, adding that this was affected by the present business climate where people’s spending power is continuing to erode. Last year, Twiga Foods fired every member of its sales team. Last month, it laid off 283 employees, representing a third or 33% of its 850 workforce as it pushes for a “lean, agile and cost-effective organization.