The archive · Commerce & Marketplaces · Strategic decision · 2020-2025
Vendease's Nigeria food-supply bet: $30M Series A, then layoffs, salary cuts and a pivot
YC-backed Lagos food procurement platform bets bulk buying plus BNPL can fix Nigeria's fragmented food market; 2025 cash crunch forces a software pivot.
Vendease
What the business is
Nigerian food procurement platform that buys supplies in bulk, stores them, delivers to restaurants, hotels and caterers within 12 hours, and lends them working capital via buy-now-pay-later.
Starting capital：Y Combinator-backed: $3.2M seed (October 2021) and a $30M Series A split $20M equity / $10M debt, led by Partech Africa and TLcom Capital (September 2022).
How it started
Founded in Lagos in 2019 by Tunde Kara, Olumide Fayankin, Gatumi Aliyu and Wale Oyepeju, Vendease launched as a marketplace connecting farms and suppliers to restaurants; founders pivoted within months to a warehouse-heavy model after customers complained about delivery times, quality and operational support.
What happened
The model scaled into eight Nigerian cities and Ghana, and by 2022 the company said it had moved about 400,000 metric tonnes for 2,000+ customers and grown revenue 5x in a year. In 2023 it abandoned its high-margin HoReCa outsourcing business for larger commercial volumes, began defaulting on supplier payments, and made its first surprise layoffs. BNPL became the main revenue driver (over $70M of credit issued by September 2024), but a tripling of naira revenue was wiped out in dollars by currency depreciation. After layoffs of 44% of staff (about 120 people) in February 2025, all remaining employees were moved to a flat salary with performance-based recovery phases plus ESOPs; the company said it was near break-even.
How it ended up
Still running as of June 2025 but in distress: seeking a bridge round, owing over ₦1.5 billion to Wema Bank and ₦60 million+ to suppliers, with founder-CEO Tunde Kara recommending a shutdown in April 2025 before stepping aside for co-founder Olumide Fayankin, who is pivoting Vendease to asset-light software, payments and credit.
Background
Vendease is a Y Combinator-backed Nigerian food procurement startup founded in Lagos in 2019 by Tunde Kara, Olumide Fayankin, Gatumi Aliyu and Wale Oyepeju. It began in January 2020 as a marketplace connecting farms and suppliers with restaurants and food businesses, then pivoted to a heavier model: buy supplies in bulk, store them in warehouses, deliver within 12 hours through logistics partners, and lend customers working capital.
The bet was that one company could fix Nigeria's fragmented food supply chain with data, inventory and credit. By September 2022, when it raised a $30M Series A ($20M equity plus $10M debt) led by Partech Africa and TLcom Capital, Vendease claimed roughly 400,000 metric tonnes of food moved, more than 2,000 customers, about $2M in procurement savings, and revenue up 5x in a year. It was already shifting from lending from its own books to partnering with banks and financial institutions.
The scaling years went wrong. In January 2023 Vendease dropped its profitable HoReCa outsourcing business to chase larger commercial volumes, made surprise layoffs, and began defaulting on supplier payments, according to Techpoint Africa. BNPL became the main revenue driver - over $70M in credit issued by September 2024 with a claimed default rate under 1% - but naira depreciation erased its dollar-denominated progress and inflation pushed up operating costs.
By March 2025 the company had cut 44% of staff (about 120 people) in a second round of layoffs, replaced salaries with a flat ₦140,000 payment plus performance-based recovery phases and stock options, and was seeking a bridge round. Techpoint Africa reported in June 2025 that founder-CEO Tunde Kara had recommended shutting down in April 2025, that Vendease owed over ₦1.5 billion to Wema Bank and more than ₦60 million to suppliers, and that co-founder Olumide Fayankin had taken over with an asset-light software, payments and credit strategy.
What has to be true
- Restaurants in Lagos buy from fragmented suppliers with unreliable quality, so a platform controlling inventory and delivery solved a real, painful problem.
- Embedded credit is the natural wedge: food businesses are too volatile for banks, but a marketplace with transaction data can underwrite them.
- The 2022 round funded expansion into a capital- and people-intensive logistics model just as the naira collapsed, so dollar-denominated losses compounded.
- Abandoning the profitable HoReCa niche for low-margin commercial volume shows how growth targets can override unit economics after funding.
- The February 2025 salary restructuring - paying everyone the same flat amount with pay tied to undisclosed targets - became the visible sign of a company running out of runway.
What can be applied
A big round is not a license to trade a profitable niche for low-margin volume: naira devaluation and ignored unit economics turned $30M into a cash crisis no pay cut could fix.
Aftermath
As of June 2025 Vendease still operates but is fragile: founder-CEO Tunde Kara recommended shutting down in April 2025, then stepped aside for co-founder Olumide Fayankin. Techpoint Africa reports debts over ₦1.5 billion to Wema Bank and ₦60 million+ to suppliers, plus delayed wages and disputed ESOP terms. Management says it is negotiating repayments, targeting break-even, and pivoting from owned warehousing toward asset-light software, payments and credit. TechCrunch reported in March 2025 that Vendease sought a bridge round, with sources putting its runway at only a few months.
Sources
- YC-backed food supply startup Vendease restructures employees' salaries
- Vendease, a food procurement platform for African restaurants, nabs $30M led by Partech Africa and TLcom
- The fall of House Vendease: High executive pay, a failed tech gamble, and mounting vendor debts
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