Vendease, a Nigerian food procurement startup backed by Y Combinator, is making some financial adjustments as it strives to stay afloat.
After cutting 44% of its workforce last month, about 120 employees, the company has now overhauled its pay structure, tying salaries to performance and providing equity in place of lost wages. At the same time, Vendease is searching for fresh capital to extend its cash runway.
Per TechCrunch, internal documents reveal that Vendease has replaced fixed salaries with a phased recovery plan that only rewards employees who hit undisclosed targets. In February, all remaining employees received a flat ₦140,000 (~$90), regardless of previous pay.
From March to May, they can earn up to 30% of their original salaries if they meet performance goals. The percentage increases to 60% from June to August, then 90% from September to November, with full pay restoration expected by December—but only if both employees and the company hit financial targets.
To make up for lost wages, staff will receive share options under an Equity Share Option Plan (ESOP). Half of these options vest over ten months, the rest over three years. However, employees can only cash out at a board-approved market value, limiting their ability to immediately benefit.
Nonetheless, Vendease insists it is in a stronger financial position. “Vendease has restructured both its business and operations. We’re a software company, and we want to focus on facilitating OPEX-heavy operations with technology rather than handling them ourselves,” a company spokesperson said.
Vendease launched in 2019 to simplify food procurement for African restaurants. By 2022, it had moved 400,000 metric tonnes of food and saved businesses millions in procurement costs. But the economic climate has changed.
The startup’s revenue in naira has tripled since 2022, but inflation and currency depreciation have wiped out those gains in dollar terms. Higher costs of operations have added pressure, forcing Vendease to rethink its spending and double down on software-driven efficiency.
One of Vendease’s key revenue streams is its Buy Now, Pay Later (BNPL) service, which provides short-term credit to food businesses that banks typically avoid. The company claims to have issued over $70 million in credit with a default rate of under 1%.
However, BNPL alone isn’t enough to turn things around. Since joining as CFO in January, Mohamed Chaudry has pushed for financial restructuring to cut costs and extend the company’s cash runway. Vendease is now in talks with investors to secure a bridge round, with the funds expected to fuel technology growth rather than cover operational expenses.
Meanwhile, sources say the company has explored a potential sale to major players in the hospitality and FMCG sectors. Vendease denies this. “It’s normal to get approached for M&A, especially when you’re a fast-growing business operating in a unique space like food. Yes, Vendease has been approached, but the founders are focused on scaling, not selling anytime soon,” a spokesperson stated.
Vendease is betting on lean operations, fresh capital, and its BNPL model to stay afloat. Whether this strategy is enough to keep the company going, or if further cuts are inevitable, is not yet known.
