Sky.Garden Stakes Merger and Acquisition amidst Poor Financing
Kenyan e-commerce startup, Sky.Garden’s founder and CEO, Martin Majlund has announced that the company will close by October 16 – due to shortage of funds – having issued a termination letter in a memo sent to employees earlier in September.
Open solely to Kenyan traders, the startup deals in mobile phones, electronics, fashion and household items ranging from decor to art and safety equipment. Bridging the gap between retailers and customers by providing solutions to delivery within 24 hours and a legitimate online store, the company charges 8% of sales price (the amount charged by the seller or paid by the customer) from its informal traders on every transaction made on the platform.
Launched in 2017, the startup has since raised a total of 5.2 million USD after raising a seed round of 1.2 million USD in 2018 and securing 4 million USD in June 2021.
Speaking on the state of the company, the CEO told TechCrunch that it is still operational but is in talk with investors and for a possible acquisition.
“Sky.Garden Limited is still solvent and operations are still ongoing. We are in dialogue with potential investors and acquirers but as we have to be diligent about doing things the right way, we chose on September 16th to give our staff 30 days’ notice while working on our opportunities.”
The CEO also addressed that its financing have been challenged by the Russia-Ukarine war noting that the VC ecosystem has been compromising. “Rising prices, inflation, war in Ukraine and increased interest rates has made the venture capital space very challenging, especially being a B2C e-commerce business. We have therefore for a while been in deep M&A conversations. But we are not the only ones being hurt by the macroeconomic contractions which have had a negative implication on the timeline of these conversations leaving us in the above-mentioned situation.”
On a rather optimistic note, Majliund stated of the impact the e-commerce startup has achieved since its commencement. “Sky.Garden has had a positive impact on thousands of small businesses, hundreds of thousands of consumers and hundreds of boda boda drivers for the past six years. We strongly believe we can continue this impact with the right partner going forward.”
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